Lake Diefenbaker Irrigation Project - Valuation Dynamics

Tags: Farm Asset Management, Management Consulting, Valuations & Appraisals

August 26, 2021

It was been more than a year since the government's announcement of the irrigation project at Lake Diefenbaker. Our consultants note considerable interest in this project through our offices from various stakeholders as irrigation is a hot topic and generally in high demand. We have provided consultation for local landowners in that area, outside farmers, investment funds, realtors, and others on irrigation matters on lands that are within the project area. Our ongoing consulting and real estate experience with irrigated farmland in southern Manitoba, either private or cooperative irrigation projects; select located in Saskatchewan, either within irrigation districts or private projects along watercourses or via wells; throughout Alberta although mainly in southern Alberta where demand for irrigated land continues to be high; and the interior BC, especially for areas producing specialty crops; provides Serecon with insights in how irrigation can benefit the farming operation. In addition, our agricultural appraisers understand the real estate market dynamics for irrigated farmland wherein multiple factors impact the value-added considerations including the costs/benefits of a water license, infrastructure, and pivot systems as well as the valuation implications of the dryland having the prospects for irrigation, soil enhancement/yield improvement prospects, and entrepreneurial incentive and profit or benefit factor. All of these factors, may or may not be value-added considerations in any given local marketplace; however, Serecon's irrigation experience throughout the prairies helps clients become knowledgeable about the probable impacts of irrigation on farmland and most notably the impact of an investment in the irrigation real estate marketplace. 

Regularly appraisal work around Lake Diefenbaker has shown that the marketplace was not changed a whole lot since the announcement of major irrigation project. Prior to the announcement, our Saskatchewan appraisers noted a significant increase in land values for high-quality lands within the project area, as there may have been speculation that an irrigation project could occur. Limited market activity over the last year suggests that the market place is in a holding pattern or a wait-and-see status wherein market participants are weighing the impact of the irrigation project on their farmland. It is expected that further impacts on valuation are unlikely to occur until the irrigation project is operational and useable for area landowners or when construction is nearing completion. That said, their continues to be strong interest in this area as discussed, which could impact the marketplace sooner than later. 

Government progress is being made on the project. However, there are many considerations that factor into play which generally lengthens the process. That said, a project of this magnitude was not expected to proceed in short order as the appropriate measures and planning need to be taken in order for the project to be successful. Overall, the interest for this irrigation project from farming stakeholders generally remains high given the benefits seen in other established irrigated areas throughout Canada. 

To find out more about our irrigation consultation; please email us here