The Birth of the Agricultural Profitability‬‭ System

December 12, 2024

By Adam Hocker, Founder of Future Profits Consulting

‬In 2006, I stood in the middle of a brand-new 2,400-head hog barn that my dad and I had just built. We were‬ both working full-time jobs—my dad in farming and me in finance—so we saw this barn as a smart side‬ investment. It felt like a great way to add extra income with a little extra effort. Little did I know, that decision‬ would set me on a path toward developing a farm management system that would change how we ran our‬ farm, eventually transforming how many other farmers approached profitability.‬

Like many producers, we were confident in our ability to care for the animals but underestimated the‬ complexity of the‬‭ operation. By 2008, two years into‬‭ running the hog barn,‬‭ the pork industry faced significant‬ challenges with burdensome supplies and no profitability. Ours and many others’ investments into new hog‬ facilities oversupplied the marketplace and drove away all profitability.‬

Soon, I discovered how volatile the agricultural markets were and how important protecting margins, practicing‬‭ risk management, and hedging would become.‬

The Early Days: Financial Challenges and Refining Solutions

‬‭ In 2008, I made a career change. I left financial and estate planning to become a controller for a pork producer.‬ I was tasked with helpi‬‭ng to‬‭ integrate risk management strategies and financial reporting, in an attempt to achieve‬ profitability‬‭. It wasn’t just that the markets were‬‭ against us. Our financial systems were too simplistic, and we‬ had no process to manage the financial risk inherent in farming.‬

At the time, I remembered a basic margin calculator that my dad had used as we fed hogs together. It was a‬ simple spreadsheet that he had developed to track costs and revenues. I took the bones, injected more missing details, and then started to implement it into the operation.‬

I built a more detailed financial model that accounted for feed costs, yardage, and other expenses, then‬ layered in‬‭ the opportunities the market was providing‬‭ that we could hedge for future periods.‬‭ The goal‬‭ was always‬ to become profitable. However, it was more important to protect the operation from detrimental swings and find‬ a way to make the organization’s cash flow and profitability more consistent.‬

What started as a simple spreadsheet for one operation eventually became a sophisticated system. Over time,‬ we refined it, and I began seeing the results firsthand.‬

Turning Point: Market Chaos and the Birth of a System

By late 2008, we had the basics of the system in place, but I needed to be more confident it would work under‬ pressure. That test came in 2009 when the swine flu hit and nearly devastated the hog market. Prices‬ plummeted, and everyone stood to lose what they worked so hard to build.‬

However, we had taken the proactive steps to hedge our profit potential. I had locked in prices when margins‬ were good, and as the market fell, our profits stayed intact.‬

This further cemented my belief that the system could work at a larger scale. We started seeing the strategy‬ perform better than the parts of the operation that were not yet in the system.‬

I knew then that this wasn’t just a band-aid fix for our operation. It was the birth of a system that could be‬ applied to any farm—something that could bring predictability to an industry defined by uncertainty. This‬ system would later become the‬‭ Agricultural Profitability‬‭ System (APS).‬

The Agricultural Profitability System (APS): Managing Risk with Confidence

APS is rooted in the belief that profitability in farming comes from something other than chasing market highs.‬ It’s about making informed, data-driven decisions that protect, grow, and help operations maintain consistent‬ profitability.

The principles are straightforward, intentional, and built on discipline.

Let me explain:

• Know Your Costs: You must know, in detail, your true costs. Without knowing your breakeven point, you’re flying blind. Farmers often guess or rely on rough averages, leaving them vulnerable to bad decisions. APS is built on real data—tracking every input, from feed and labor to insurance andd repairs—so you know precisely what raising each pig or bushel costs.
• Manage Risk, Don’t Gamble: Many farmers shy away from risk management tools like hedging because they see it as gambling. Hedging is not based on games of chance. Hedging (or what we call risk management) is using data and decision-making to lock in prices when margins are favorable. It’s not about market timing—it’s about ensuring profitability regardless of what happens.
• Stay Disciplined: Emotional decision-making (also known as – thinking with your gut) is one of the biggest pitfalls in farming. The market is unpredictable, and reacting to every price movement is tempting. APS removes the emotion from the equation. Sticking to a consistent, disciplined approach eliminates the guesswork and protects your profitability.

Expanding APS: From Crisis Management to a Repeatable System

What started as a way to bring stability to an operation as it was growing, it became something much larger. As‬ I fine-tuned the system, it became clear that APS could be repeated and applied to any commodity. The‬ principles hold whether you produce hogs, corn, soybeans, or cattle. It’s not about chasing the market; it’s‬ about knowing your numbers, managing risk, and being disciplined by sticking to a plan.‬

After several years of success using APS and driving consistent profitability, I saw an opportunity to help others‬.‬ This led to the launch of‬‭ Future Profits Consulting‬‭ (FPC)‬‭ in 2018, where I started working with farms‬‭ of all‬ sizes. But the core of APS remained the same: helping producers gain control over their costs, lock in profits,‬ and sleep better at night, knowing they were protected from market volatility.‬

Where Do You Even Start?

Whenever I meet with a new client, the conversation usually starts the same way:

• How do we achieve consistent profitability?
• What happens if the markets shift?
• Is there really a way to make this process less stressful?

Here’s what I always tell them:

1.  Start by Knowing Your Costs. Many farmers guess at their breakeven costs. But guesswork leaves you vulnerable. Start by tracking your actual production costs. Include everything—feed, fuel, labor, insurance. This is the bedrock of APS. Once you have this data, you can decide when to sell and how to manage your risk.
2.  Don’t Be Afraid of Hedging—But Start Small. Hedging isn’t gambling; it’s about protecting your margins. If you’re new to it, start small. Lock in prices for a portion of your production—maybe 10% or 20%—and build from there. You’ll gain confidence in the system as you see how it protects your bottom line.
3.  Forget Trying to Time the Market. Waiting for the “perfect” price is a losing game. APS is designed to eliminate guesswork and create discipline. If you can lock in a price that guarantees a profit, take it. Consistency over time beats chasing market highs.
4.  Stay Disciplined. The hardest part of APS isn’t the math—it’s the discipline. Stick to the plan, even when the market is volatile. Emotional decisions lead to missed opportunities. Over time, a disciplined approach will yield more stable, reliable profits.

Manage Your Farm’s Profitability And Stop Leaving It to Chance

Farmers must ask themselves:‬‭ Are you in control of‬‭ your farm’s profitability, or are you leaving it to chance?‭ Do you know your exact breakeven cost? Are you confident in your ability to protect your margins, or are you‬‭ simply hoping the market works in your favor?‬

If you’re not sure of the answers, it’s time to consider a system like APS that can give you control.‬

Transform From Uncertainty And “Thinking With Your Gut” to Confidence

One of the most rewarding parts of implementing APS has been seeing the transformation from previously‬‭ skeptical clients to clients who wish they’d started sooner.In one case, we began working with a mid-sized hog‬‭ producer who had always operated on “gut instinct.”

Their numbers were vague—they knew how many pigs they sold each year, but the specifics of how many and‬‭ when they were sold were fuzzy. They were initially reluctant, but after going through the process, they couldn’t‬‭ believe how much clarity they gained.‬

For the first time, they knew exactly how many pigs they were selling, their true costs, and how to protect their‬‭ profits with certainty. Within a few months, they called and said,‬‭ “I wish we had done this years ago.”

The real power of APS is not about making farming easier—it’s about making it more‬ predictable, less stressful, and, most importantly, more profitable.‬

About the Author:‬
Adam Hocker is the founder of Future Profits Consulting and the creator of the‬‭ Agricultural Profit System‬ (APS)‬‭™ . A dedicated advocate for the agricultural community, Adam helps farmers strengthen their‬ profitability by merging emotional awareness with strategic decision-making frameworks.‬