The Von Thunen model of agricultural land use was created by farmer and amateur economist J.H. Von Thunen  in 1826. Von Thunen's model was created before industrialization and says that farmers have to take 3 things into account: the cost of land per year, the price of crops when sold, and the cost of transportation to market.

The first ring in the von thunen model produces dairy products, fruits, veggies, and flowers. Land costs in the first ring around the city are high, but so are sale prices for these products. All of these products spoil and require quick transport to market
Wood is grown in the second ring because it requires lots of land and the land must be cheaper. The forests are located in the second ring because back when Von Thunen wrote this model, Germany was heating primarily with wood.
Field crops like cereal grains are in the 3^rd ring because they require vast amounts of land and are not nearly as expensive to transport as wood or fragile fruits and veggies. Also, farmers need land that they can afford to leave fallow for 1 out of every three years.
Ranching and livestock requires huge amounts of cheap land that doesn't necessarily have to be good for anything except growing grass.
(For you permaculture people out there, check out this comparison between the Von Thunen model and the basic permaculture model. Second paragraph)