Ag Economist Shares Pros, Cons of Data Centers
Published: Friday, March 20, 2026
Data centers are "exploding" across the U.S., according to one observer. Even so, not every community is welcoming them with open arms. Fulton County recently voted to establish a one-year moratorium on data center projects, joining eight other Indiana counties that have passed similar laws.
In regions where they have been welcomed, data centers have generated high-paying jobs and millions of dollars in revenue for infrastructure improvements.
Recognizing that data centers have both risks and benefits, Indiana Farm Bureau and Fulton County Farm Bureau sponsored an educational program last Monday at the 4-H fairgrounds in Rochester. The main speaker was Roberto Gallardo, associate professor in the Agricultural Economics Department at Purdue University.
With the purpose of providing an unbiased perspective, Gallardo said there are at least 620 data centers being built right now in the U.S., with that growth being driven by the need for more computing power—thanks to artificial intelligence.
"It has really become critical infrastructure for banking, healthcare, government and everyday applications," Gallardo said. "You may not realize it, but AI is being embedded in a lot more applications every day."
Gallardo said every data center is different. There are three types: enterprise, colocation and hyperscale. An enterprise facility is owned by one company and is generally smaller in scale. A colocation data center is a shared facility; many businesses rent space for their servers. Hyperscale centers are massive campuses run by larger firms like Google, Amazon, Microsoft or Meta.
"What's driving the conversation today is the hyperscale ones that are just massive, massive facilities that just crunch numbers," Gallardo said.
He said hyperscale data centers are "energy hogs."
"The No. 1 issue you will continue to hear—this will not go away—is the energy use," he said.
In 2024, data centers consumed 183 terawatts of electricity. That equates to roughly 4.4% of total U.S. electricity demand. With more data centers coming online in the next two years, that number is expected to rise to 12%.
Gallardo said not every community's electrical grid can satisfy the demands of a new data center. That's why in many cases the data centers utilize diesel generators to produce more electricity.
"If you have a hyperscale data center knocking on your door, on average, they may use as much as 100,000 households use in electricity," he said. "Those are massive, massive projects."
Data center projects cause a spike in consumers' electric bills by 8% on average and by over 25% in high demand markets like northern Virginia. He said that region is known as the "epicenter" of data centers.
In one Virginia county in 2023, data centers consumed 21% of total power in 2023, surpassing all residential use.
Another issue with data centers is the large volume of water they require. U.S. data centers consumed 17 billion gallons of water in 2023. Gallardo said that figure could double or triple by 2028. The water is used to cool the computer equipment, which creates a tremendous amount of heat.
He said researchers are trying to find alternative cooling methods, such as pumping gas that can absorb heat and using other types of liquid that can
be circulated through the computer servers.
Many data centers generate a humming sound, which runs 24 hours a day, seven days a week. This concern should be addressed at the beginning of negotiations, Gallardo said.
Land use and character are other issues. Some rural areas reject the idea of having a hyperscale campus in their respective communities. They believe it would disrupt the rural character and consume valuable farmland.
Gallardo said it's up to each community to have a conversation about its identity and whether a data center is a good fit.
In the areas where they have been accepted, data centers have generated a large amount of tax revenue.
"There is a county in Virginia where property taxes have gone down 38% since 2010, because they did it right," he said.
Data centers will create hundreds of construction jobs during the multi-year buildout phases and between 30 and 50 good-paying jobs once the facility is up and running.
Communities often see improved broadband service and digital infrastructure once data centers come online.
Gallardo said communities should be careful about offering tax abatements. Those can significantly reduce the revenue a community receives from those developments.
Community residents may see higher electricity rates, while local roads and intersections may need improvements. Gallardo said these costs could be shared with the data center.
"They (higher costs) do not have to be absorbed by the community entirely," he said.
When a data center project is done right, it can be transformative, Gallardo said.
"It can be the anchor of a tech-based economic development effort."
Communities in southeastern Wisconsin are doing this.
"You can then ask them (data centers) to pump money back into the community for community engagement or foundations or nonprofits," he said. "That can be, and should be, discussed before, not as an afterthought when you're negotiating with the data centers."
Gallardo urged communities to "think beyond the traditional economic development lens" and consider how a data center could become a transformative anchor for regional development.
If a community decides to embrace a data center project, the key, according to the Purdue agricultural economist, is securing commitments before any documents are signed.
"Try and get them to the table at the beginning of the negotiation, not as an afterthought," he said. "Don't wait on promises from them. Get them in writing."
Gallardo was asked why northern Indiana is attracting so many data center projects.
"My guess will be water, to a certain extent," he said. "They (developers) do their math. They research you before they knock on your door. They're coming to you for a reason. Sometimes they don't disclose it, sometimes they do. It may be proximity to Chicago, because some of these data centers are going to be a backup of a backup."
Ryan Hoff, director of public policy for Indiana Farm Bureau, provided another possible reason why data centers are eyeing the Hoosier state.
In 2019, the Indiana Legislature approved a state sales tax waiver on all computer equipment for data centers. He said that the waiver is worth billions of dollars in the aggregate.
He added that the waiver also applies to the sales tax on energy use.
When asked about how to hold data centers accountable to their promises, Gallardo said the commitments should be spelled out in a Community Benefit Agreement, or CBA. In one community, the data center was required to have a public portal that allowed citizens to see how much money was coming back to schools, libraries and local government.
In Fulton County, a real estate investment and development company, Decennial Group, was looking to purchase land in the Akron area. The company held a public meeting in February to explain its plans but never submitted a formal proposal to the county, according to Rick Ranstead, one of three county commissioners. He attended last Monday's meeting in Rochester.
At the February meeting, David Pavlick, co-founder of Decennial Group, said the company wanted to build a hyperscale facility on 300 acres with a closed-loop system to minimize water use. The project represented an investment of up to $150 million.
Ranstead said he hasn't heard from Decennial Group since the moratorium was passed earlier this month.
Hoff added that Fulton County has a year to prepare for whatever may come next.
"We've got a year with the moratorium," he said. "That's an opportunity to communicate, to organize, if you will."
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