This quote is expressing Jim's reaction when he first encounters the wide open unsettled expanses surrounding his grandparents' farm. Coming from Virginia, the surroundings appear undeveloped, but very promising to those willing to do the work of developing.
There seemed to be nothing to see; no fences, no creeks or trees, no hills or fields. If there was a road, I could not make it out in the faint starlight. There was nothing but land: not a country at all, but the material out of which countries are made.
Jim was recognizing emptiness but not hopelessness. There was tremendous potential in that "nothing," potential to build farms and towns and cities. Jim was realizing that the already settled existence he had known in Virginia was far away, but that it was possible to build a different kind of existence in this new place.
Jim concludes that a rural existence is not for him, but he comes to respect Antonia's success in surviving and thriving in the new country that she made for herself.