Food & Beverage

As president is sworn in, pizza investors buy in

The inauguration of a new president can be an unsettling time for publicly traded companies, but as President Joe Biden took the lead last week, investors stayed faithful to the power of the pie.

Photo: iStock

January 25, 2021 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza investors were apparently in a positive mood last week, as the U.S. ushered in its new president, and stock prices for all four publicly traded pizza restaurant brands monitored by this site turned in nice gains. That — combined with the fact that most pizza commodity prices dropped over the week — likely put some smiles on restaurant leaders' faces.

On Wall Street, pizza restaurant mega-power, Domino's, managed to add $5.14 its stock value over the trading week to close Friday at $380.37. Papa John's also gained in value, increasing the price of its stock by $3.59 over the week's buying and selling to close Friday $98.82.

Pizza Hut parent, Yum Brands, edged up 47 cents in value, to end the week at $107.09, while Pizza Inn and Pie Five parent company, Rave Restaurant Group, continued its upward trend to close Friday at $1.11. That's up 5 cents from the previous week's close.

Cheese

For that all-essential pizza commodity — cheese — U.S. trading prices took a hit, dropping 21 cents on the weekly average price for blocks to end the week at $1.70. Barrels also trended lower but not as much. The average price for barrels last week was down 16 cents to almost $1.45, according to the U.S. Department of Agriculture. Barrels closed lower than that at $1.39 while 40-pound blocks ended up at $1.61 at the close of trading.

Perhaps contributing to the lower prices is the fact that the U.S.D.A. said cheese production has regained its momentum, due in part to growing milk supplies, with lighter Class I demand than in previous years, which kept spot milk at steep discounts.

Typically, schools returning from holiday breaks would spread milk a little thinner, but with limited in-person activity at schools throughout the country, more milk is bound for the cheese vat. Additionally, a fairly mild winter in many parts of the country has milk levels higher ahead of the spring, so cheese inventories have grown.

Wheat

Wheat prices trended lower with overall wheat prices dropping more on the week than they have in about five months. March Kansas City hard red winter futures fell nearly 22 cents to $6.14, while March Chicago soft red winter wheat futures were down nearly 26 cents to $6.35. Lastly, on the Minneapolis Grain Exchange, March spring wheat futures fell 24 cents to $6.11.

Auto fuel

The only potential downer to this pizza party of lower commodity prices last week was the fact that gas prices continued to rise, although not as much as the previous week. The American Automobile Association also reported that gas demand increased last week, too.

Over the course of the last week, gas prices grew two cents or 16 cents more than last month. But that's still an average price nationally that, at $2.39, remains 15 cents under what prices were last year at this time.

Gas demand increased substantially from 7.53 million barrels a day (b/d) to 8.11 million b/d, according to the U.S. Energy Information Administration. Total domestic gasoline supplies fell by 300,000 barrels (bbl) to 245.2 million bbl, while total crude utilization across domestic refineries took a small step forward from 82% to 82.5%. All of these factors, including sustained higher crude prices, have contributed to higher pump prices for drivers and will likely lead to continued increases in pump prices in the weeks ahead, AAA said.

The biggest weekly gas price increases nationally were topped in Florida, which averaged a 10-cent increase. Utah followed with an 8-cent increase, followed by Nebraska which saw a nickel increase in the price of gas, AAA said.

This morning, the average price of a gallon of regular unleaded gas was $2.40, actually 15 cents higher than a month ago. At an average of $2.73 a gallon, mid-grade fuel followed that same trend, as did premium at $3 a gallon.

The increase over the month was not as marked for diesel fuel, which averaged $2.64 today, up 9 cents from last month. E85 fuel averaged $2.10 this morning, which was 4 cents higher than last month.

Natural gas

Natural gas spot prices fell at most locations for the seven days that ended on Jan. 20. The Henry Hub spot price fell from $2.75 per million British thermal units (MMBtu) to $2.42/MMBtu during that period.

At the New York Mercantile Exchange, the price of the February 2021 contract decreased 19 cents, from $2.73/MMBtu to $2.54/MMBtu. The price of the 12-month strip averaging February 2021 through January 2022 futures contracts declined 10 cents/MMBtu to $2.74/MMBtu.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 35 cents/MMBtu, averaging $7.35/MMBtu for the same period. The prices of natural gasoline, ethane, butane, isobutane, and propane all rose, by 1%, 2%, 5%, 5% and 8%, 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.