The increasing reliance on “cloud-based computing” and recent explosion of online use of artificial intelligence (AI) has led to a booming demand for large data processing centers. Some of these facilities have been built in more urban areas, but due to their tremendous size, companies often seek to locate them in more rural areas, making these developments yet another well-financed competitor for farmland. While their potential impact on agricultural land and land values may be the most obvious concern for neighboring farms, there are numerous issues created by these facilities that farmers should consider if a data center development is proposed in their area.
Data centers are specially designed facilities built to house computer systems, telecommunication systems and memory storage facilities. According to the data center map there are currently 44 data centers in nine different markets within Wisconsin. Data centers need a minimum of 40 acres for a small center and upwards of 1000 acres for a large center. Locating one of these facilities in an otherwise agricultural area could impact land values, but it is also likely to require changes in local zoning that could impact nearby farms.
A data center costs $7-12 million per megawatt to build. A small data center has a 1-5 megawatt consumption rate, and large-scale facilities range from 20-100 megawatts. For context, 100 megawatts could power approximately 25,000 homes in Wisconsin, and the growing number of these facilities throughout the state and country present a significant challenge for power generation and the cost of power to other consumers. Costs for construction of power generation infrastructure is generally born by ratepayers throughout the system, and increased demand for power can drive up cost due to scarcity.
Much of the energy consumed by these facilities, often close to half, is used to cool their systems. This is typically done by using either a water or air-cooling system. Water is used in different forms to cool the centers systems. The most popular way to use water is by utilizing chilled water systems or cooling towers to remove heat from the systems. When using a chilled water system, coils are used to circulate the cool water from the central chiller and collect the heat from the data centers. The system then expels the absorbed heat that is collected through the coils. Then it is propelled outside into the air.
There is controversy around this method due to the amount of water consumption involved in the process. Water consumption depends on the size of the facility. Hyperscale data centers are large facilities like the ones built by major companies like Google or Microsoft, which can be millions of square feet in building size. They can use an average of 550,000 gallons of water a day. On the wholesale and retail side, there are those within the 100,000 to 250,000 sq ft. The smaller facilities use an average of 18,000 gallons of water a day and the larger ones can use 88,000 gallons.
Water for the facilities is usually supplied by municipal or regional water utility facilities, but rural locations may require multiple high-capacity wells running on an ongoing basis. The water used in the data centers can only be recycled through the systems so many times due to scale-forming minerals or because of the water’s conductivity. Water that can no longer be used in the centers can be discarded or repurposed for irrigation. Hyperscale facilities are tasked with water replenishment projects due to their large amounts of water consumption. The large facilities have pledged to be more water positive by 2030, but what that looks like right now is unclear. Some facilities have stormwater retention ponds to collect water for various functions within the facilities, but using this water requires more infrastructure to treat the water before data center usage.
The air-cooling systems reduce the usage of water as a coolant in the process. This system monitors the temperature outside and draws cool air in through a filter and directly into the server rooms. There is also a method that filters hot air through a wet filter and pushes cool air into the server rooms.
In addition to considering the impacts water consumption for cooling may have on local wells, farmers should also consider the potential impacts of stormwater runoff from the facilities. These impacts can be mitigated if management mechanisms are included in the design of the facility but could still impact nearby landowners.
These landowners may also be impacted by 24/7 lighting and noise from the facility. Perhaps more importantly, nearby landowners may experience substantial disruptions to their property from new utility easements necessary to support the needs of these facilities.
In the short term, these facilities may provide a substantial boost to the local economy from construction jobs and the need to feed and house a construction workforce, but in the long term, they support a rather limited number of jobs for the size of the investment. The value of the improvements may add substantially to the local property tax base, but that depends on the tax incentives agreed to by state and local governments.
According to the Wisconsin Department of Revenue, there is a sales and use tax exemption for the sale of certain property for data centers that are certified by the Wisconsin Economic Development Corporation. The buildings must meet a qualified investment in Wisconsin within five years of WEDC issuing its certification. The investment dollar amount is set by the population of the county that the building is being built in. What is included in the exemptions can be found here. There are three facilities in Wisconsin as of February 2025 that have been certified by WEDC.
The rapid expansion of data centers across rural landscapes presents significant considerations for local farmers. Beyond the immediate concerns of land use and value, these facilities introduce complex challenges ranging from increased demand on local utilities to potential environmental impacts like water consumption and stormwater runoff. While they may offer short-term economic benefits through construction jobs and tax revenue, the long-term effects on agriculture and community infrastructure warrant careful assessment and planning. As data centers continue to proliferate, farmers and policymakers alike must engage proactively in ensuring that these developments align with sustainable practices and mutually beneficial outcomes for all stakeholders involved.
