Food & Beverage

2020's final pizza trading week starts with a gas price 'goose'

A shortened trading week that ended in the early afternoon last Wednesday, produced little in the way of pizza company stock price shifts, but last week's gas price spike gave delivery-heavy pizza companies plenty to deal with.

Photo: iStock.

December 28, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

Investors headed into the final trading week of 2020 today, after a relatively quiet 2 ½-days of trading before the Christmas holiday, when there was little movement in publicly traded pizza stock values. Pizza brand commodity costs took a hit thanks to a spike in auto fuel prices for delivery of all those late-night deliveries of over the previous holiday week.

Domino's was one of two brands monitored by Pizza Marketplace weekly that managed to eke out a small increase in value, closing up 2 cents on the 3-day trading week last Wednesday at $396.73.

The smaller two-brand pizza company, Rave Restaurant Group, managed a gain of 4 cents last week when markets closed at 1 p.m. Wednesday. The Pizza Inn and Pie Five parent company ended the week at 90 cents.

The run-up to Santa's big day was a bit more downbeat for Pizza Hut parent company, Yum Brands, and its Louisville, Kentucky-based competitor, Papa John's. Both companies lost value, with Yum Brands closing at $107.54, down from $109.78 the previous week. At Papa John's, stock values fell $2.93 over the three days of trading to close Wednesday at $87.54.

Cheese

In cheese trading, block prices increased nearly 10 cents, and barrels trended about 15 cents higher, according to the U.S. Department of Agriculture.

Barrels closed Wednesday at just shy of $1.56, up 15 cents for the week, while at $1.65, 40-pound blocks were up almost 10 cents. Previously this month, cheese prices had been trending more steady.

Pizza cheese continues to move well, according to the U.S.D.A., despite COVID-19 impacts on other food service staples. Some Midwestern producers relay changing production channels into aging-friendly cheese ahead of potential stock growth.

Wheat

January wheat prices trended down 2 cents to $6.27 per bushel. Prices for the commodity, however, have remained strong all the way to this last week of the trading year.

In Kansas City, rail bids for hard red winter wheat futures, ordinary protein, were up nearly 3 cents to $5.28 to $5.38 per bushel.

Auto fuel

The most-of-the-year trend of falling pump prices, reversed itself last week for one last hooray on holiday travel fuel prices as people went "over the river and through the woods" to their respective gift-giving bonanzas. Pump prices spiked more than 6 cents in the run-up to Christmas, to $2.22 just before the big day — the highest national average since September, according to the American Automobile Association.

AAA said that rising crude oil prices and tightening supply both contributed to the price increase. The domestic price of crude has been steadily rising since November, with prices topping $49 a barrel (bbl), returning to prices pre-pandemic in February. Prices began to rise last month alongside vaccination news and have only increased with it becoming available, the organization said.

Last week, the Energy Information Administration data shows U.S. gasoline supply levels sit at 238.7 million bbls, which is 1.6 million bbls more than a year ago. While a healthy supply, the year-over-year surplus has been much greater through the last nine months. This fact combined with low utilization rates, which are down 11%, indicates supply could tighten in weeks ahead especially with refinery consolidations in the northwest and maintenance in the upper Midwest.

However, demand remains at an extremely low level. AAA believes this factor will impact gas prices, pushing them cheaper in January.

"The recent gas price pump jumps are a bit surprising given December demand numbers are the lowest posted for the month since 1999," Jeanette Casselano McGee, AAA spokesperson, said in the organization's weekly overview. "The increases are likely to be short-lived, especially as holiday road travel is expected to see at least a 25% decline."

Nationally, the biggest increases occurred in Wisconsin (+13 cents), as well as Michigan and Indiana (+12 cents), and lastly in Ohio (+11 cents). The current average price for a gallon of regular unleaded is $2.25, which is 12 cents over what we paid last month at this time. Mid-grade ($2.59) and premium ($2.86) followed suit. Finally, at $2.55 a gallon, diesel prices were up 13 cents, while at $2.05, E85 was up 12 cents from the month-earlier price.

Natural gas

Natural gas spot prices rose at most locations for the latest week the U.S. Energy Information Administration reported that ended on Dec. 16. The Henry Hub spot price rose from $2.45 per million British thermal units (MMBtu) to $2.67/MMBtu over the same period.

At the New York Mercantile Exchange, the price of the January 2021 contract increased 24 cents, from $2.44/MMBtu to $2.68/MMBtu The price of the 12-month strip averaging January 2021 through December 2021 futures contracts climbed 20 cents/MMBtu to $2.78/MMBtu.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 21 cents/MMBtu, averaging $5.60/MMBtu for that report week. The prices of propane, isobutane, ethane, butane and natural gasoline rose, by 1%, 1%, 4%, 8% and 9%, respectively.

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.