Farmland values evolve from data center expansion

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A pair of ag real estate experts say the development of data centers is changing the value of farmland in parts of the U.S.

Robert Veldman with Pinion Land Advisory says parcels are typically priced based on what it can produce, but it’s transitioning to what assets are nearby. “What we’re seeing for data centers is 10 to 15 times the appraised value.”

However, Veldman says as more data centers come online near the first facility, values can drop.

Quint Shambaugh says the most important consideration for companies is accessibility to power and fiber in rural areas. “Find a way to get megawatts there. If they don’t have energy, they’re never going to build anything there.”

He says water availability is also a priority, but, “This has kind of calmed down with the emergence of closed-looped systems, but still you need enough water in the area to run the daily activities.”

Shambaugh says flexibility in the permitting processes with local and state zoning boards is also important.