Is Cloud Storage Encroaching on Arable Soil?

Data Centers Eye Agricultural Land

The demand for data centers is booming as artificial intelligence technology hits the market. Hyperscale projects have turned their eyes to rural, often agricultural, pieces of land to accommodate their energy and resource needs. Is there anything to be gained for agriculture or does it spell increased land loss for farming and ranching in the U.S.?

There is money to be made in data. Global estimates suggest data centers generated close to $250 billion in revenue in 2024. Spending on infrastructure builds was nearly double that as individual companies and large hyperscale centers moved to enhance their storage capabilities and accommodate faced pace growth fueled by AI. Any state willing to allow data center development projects within their boundaries stands to cash in on the billions of dollars in revenue opportunity the industry predicts will maintain into the foreseeable future.

Response from state residents is a mixed bag. Data center construction and development will bring jobs and economic stability, often in low income regions, but they also stand to change communities, drain resources and add potential environmental risks. While some states are revamping legislation to accommodate hyperscale data centers, others are pushing back to quite literally hold their agricultural ground.

Economic Value of Data Centers

States in favor of housing data centers see the benefit of building job opportunities. Louisiana in particular went out of its way to sweeten a deal with Meta guaranteeing the tech powerhouse would choose to build its largest center there.  The project will bring upwards of 5,000 jobs during the construction phase and, once completed, add 500 full time positions. Though data centers are criticized for generating revenue but not local jobs, the quantity of positions is significant for the state. Louisiana hopes they will soon be a tech hub thanks to data center infrastructure and that Meta’s project is the first of many.

The potential for increased job opportunities are not lost on other states and their representatives. Rural agricultural communities worry that the next generation of youth will have no reason to move back to the farm towns they grew up in. Without jobs that pay livable wages, will agricultural and rural economies survive? 

Yet, everywhere data center projects have been proposed you are sure to find local residents in opposition. One Kentucky family has turned down a $35,000 per acre offer from a company hoping to turn their cattle ranch into a data center.  They have no intention to sell off agricultural land to be repurposed for data storage.

The ninth district comprising Michigan, Minnesota, Wisconsin, North and South Dakota and Montana has 25 hyperscale data centers projects in the works between proposal phase and construction. However, Montana and Wisconsin have suspended construction on four facilities. North Dakota is currently the only state with fully operational hyperscale data centers. 

Meanwhile, central Texas residents are worried they are losing valuable agricultural land as well as property values to data center infrastructure. Land purchased between San Antonio and Austin that was formerly used for farming and ranching is shaping up to be the next data center site. Neighboring ag plots hope they can stay in production alongside the data center, but fear the project will have a negative impact on local resources.

Data Center Resource Efficiency

Aside from transforming rural views and local economies, there’s a fair amount of debate about resource management when it comes to housing hyperscale facilities. As prime areas become oversaturated with data centers companies are looking beyond urban landscapes for suitable locations. The ninth district is desirable because it has reliable resources and a suitable climate. 

Data centers require significant cooling measures. Opting to build in cooler regions is a strategic move to keep energy costs associated with temperature control low. The Midwest and northern states have stable water resources also necessary for cooling. Though Louisiana wants to be known for its data centers and Meta was anxious to plug into established grid systems, there is some concern about reliable energy and water and who gets first dibs on these resources in a crisis situation.

From Kentucky, to Montana to Texas energy usage and management are being questioned. The Louisiana site will use twice as much electricity as the city of New Orleans does on a peak usage day. Meta will build three gas powered plants to support energy demands. The state hopes that expansion efforts like this will make the grid stronger and that new building projects will be more efficient than previous models. Yet, at the end of the day, data centers require more energy use and consume more resources no matter how efficiently they are built.

Are Data Centers a Good Use of Land?

Is this just a case of grumpy neighbors or is the door wide open for technology companies to scoop up land that could be used to produce food for the country and contribute to global trade? Finding 2,000 plus acre plots of land for sale is far easier to do in rural areas than in urban areas. We need them and there are fewer places to build them in close proximity to urban development. Even farmers and ranchers are contributing to the demand for cloud storage and AI assisted tools.

The Kentucky family’s situation is interesting in that the land holds value for data center development, however they have no similar offers to purchase the land for further agricultural development.  Ag landowners could find themselves in a lucrative opportunity if they are willing to let go of commodity production. But, in doing so they change the value of their neighbor’s land. Saying yes to a data center could be saying yes to housing developments for employees, more roads and stoplights, and redistribution of resources. It could also decrease the value of neighboring land. Like the Texas families worried about a data center, will hyperscale neighbors be able to sell their land some day if it comes with a view of industrial buildings?

Still a fair few states see housing data centers as a status symbol. Technology is the future and they want to be at the forefront of infrastructure development that supports the fast expanding digital world. Sacrificing arable acres could be the move that allows struggling states to become economically competitive again.