P.E.I. farm income dropped sharply in 2025 as historic drought and rising costs hit hard

Farm incomes on P.E.I. Dropped endure twelvemonth by 34 per cent, or nearly $37M

Prince edward viii Island farmers made significantly less money in 2025 as a historic drought and rising expenses continued to squeeze farm operations.

P.E.I. Potato farmer Aike Wilting calls 2025 the worst drought he's ever seen.

"As long as I can remember, we haven't seen anything like it," he said. "Potatoes are made of 80 per cent water and when it only rains three inches in eight weeks, and those three inches come right after you've finished planting ... Well, it's pretty hard to grow anything when there's no water."

Wilting said that drought combined with rising expenses, particularly fuel and fertilizer costs, made it a tough year.

"It was quite significant. It's sure noticeable when you lose a percentage of your income," he said.

And Wilting isn't alone.

Realized net income — the money farmers take home after accounting for cash receipts, operating expenses, depreciation and income in kind — dropped by about 34 per cent on the Island, falling from roughly $108.6 million in 2024 to about $71.5 million in 2025, according to new preliminary data from Statistics Canada.

“These numbers do seem accurate to me,” said Donald Killorn, executive director of the Prince Edward Island Federation of Agriculture.

“We see a reduction in revenue, which I would expect after a significant drought like we had in 2025. I see a consistent, smooth increase in expenses… and ultimately, lower revenues and higher expenses are going to result in a worse bottom line.”

The decline marks a significant reversal after several years of growth in farm income on the Island.

Nationally, realized net farm income also declined, though by a much smaller margin.

It edged down 0.3 per cent to $8.3 billion in 2025. Statistics Canada said that across the country, the increase in farm operating expenses outpaced the growth in cash receipts — farms' gross revenue — and that led to the overall decrease.

On P.E.I., farm cash receipts slipped slightly to about $835 million in 2025, while operating expenses continued to climb, reaching $683.8 million, about 40 per cent higher than five years earlier.

Killorn said fertilizer and fuel, particularly diesel, remain among the largest costs facing producers.

“Expenses for farmers are increasing faster than the rate of inflation, and so that’s significant, and we’re seeing that at the grocery store as well,” he said.

Killorn added that the 2025 growing season was the worst drought he has seen in his lifetime.

A drought of that scale affects virtually every part of P.E.I.’s agricultural sector, he said.

“Of course, potatoes are critical to the overall economic picture, and that sector was hit particularly hard by the drought, and that’s, I think, reflected directly in the numbers,” he said.

Killorn said another factor behind the decline in realized net income was higher depreciation — the loss in value of farm equipment and infrastructure over time.

While depreciation reduces net income on paper, he said it also suggests continued investment by farmers in equipment, buildings and other assets needed to maintain and grow production.

Looking ahead, Killorn said producers will continue to face pressure from rising input costs, especially fuel.

It has been three months since the U.S. And Israel launched strikes against Iran. The conflict has largely shut down the Strait of Hormuz — a critical oil-shipping route in the Middle East — sending global fuel prices soaring.

And as energy prices remain a major issue, much is riding on this year’s crop.

“We need a good solid growing season, and that’s really what we depend on. We need access to good agricultural land, access to water, and we can continue to deliver strong economic performance for Prince Edward Islanders,” Killorn said.

Reporter

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