Lobster fishermen aren't sure prices will be high enough to cover costs. (CBC)

The Seafood Processors Association of P.E.I. is sitting on $25 million worth of frozen lobster, and it wants government support to deal with it.

The lobster was caught and processed in 2008, but with a failing economy consumers have lost their taste for expensive luxuries, leaving lobster processors with valuable inventories they can't sell.

"We're discussing all of the possibilities," Olin Gregan, executive director of the association told CBC News Thursday.

"Hopefully over the course of a short week, we will arrive at some hard and concrete decisions with respect to what we need — what can be given the processing association and/or the industry to help us over this hurdle."

As the spring lobster season approaches, the unsold inventory creates a problem for everyone in the industry. It has driven lobster prices so low many fishermen are wondering if they can cover the cost of going out on the water. In the current tight credit market, processors wonder if they will be able to borrow money against their unsold inventories to pay for this spring's catch.

Gregan said the processors met with representatives from both levels of government on Wednesday. He won't say whether they've asked government to buy the stockpiled lobster inventory or if they are looking for loan guarantees.

The issue has serious implications for the P.E.I. economy. The lobster industry generates $250 million in revenue a year, and employs 7,500 people during peak season.