Article

Commodities: A good week to be in the pizza biz

Despite all the doomsayers last week, predicting the beginning of a restaurant recession, pizza restaurateurs had a very good week last year at the market. Commodity prices -- aside from auto fuel -- all dropped, while the value of pizza stocks rose, particularly at the smaller take-and-bake Papa Murphy's chain.

September 19, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Despite all the doomsayers last week, predicting the beginning of a restaurant recession, pizza restaurateurs had a very good week last year at the market. Commodity prices -- aside from auto fuel -- all dropped, while the value of pizza stocks rose, particularly at the smaller take-and-bake Papa Murphy's chain. 

Cheese: 
Cheese prices continued their overall decline that began in early August. On Friday, the average price had dropped to $1.67, down from $1.71 the previous Friday and a continuation of this commodity's overall price drop, beginning about a month ago when cheese was selling for an average of about $1.87 in mid-August.  

Wheat: 
Wheat price also continued to plummet as news of huge global supplies of all grains continued to circulate. Barring some major weather problems that might affect the crop, most analysts were predicting prices for this commodity would stay low for the rest of the year. About a week ago, the U.S. Department of Agriculture said supplies of wheat worldwide are at near-record highs. 

In the U.S., soft red winter and hard red winter wheat prices climbed slightly in the first part of August, then began plummeting. Hard red winter wheat fell $9 to $168 a ton, while soft red winter wheat dropped $14 to $177 a ton. The price of hard red spring wheat climbed $13 to $243 a ton, while soft white winter wheat prices were up $9 to $204 a ton. 

Gasoline and diesel fuel
The long overall fall in fuel prices, appears to be moderating, if not increasing slightly. The current average price of a gallon of regular is $2.21, up about 3 cents from last week and 7 cents from last month, but still below last year's average of $2.30 a gallon. 

That was also the case for mid-grade, premium and diesel fuel, which were all up 2 to 3 cents a gallon from the previous week and about 6 cents from a month ago for all three types of fuel. Nonetheless, mid-grade, premium and diesel are all still about a dime a gallon less from last year at this time. 

Natural gas 
Natural gas spot prices were mixed this report week (Sept. 7 to Sept. 14). The Henry Hub spot price rose from $2.82/million British thermal units (MMBtu) last Wednesday to $3.04/MMBtu yesterday. At the New York Mercantile Exchange, the October 2016 contract rose 21 cents, from $2.676/MMBtu last Wednesday to $2.889/MMBtu yesterday.

Net injections to working gas totaled 62 billion cubic feet (Bcf) for the week ending Sept. 9. Working gas stocks are 3,499 Bcf, which is 6 percent more than the year-ago level and 9 percent more than the five-year (2011—15) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 14 cents, closing at $4.83/MMBtu for the week ending Sept. 9. The price of natural gasoline and ethane rose by 3 percent, butane and isobutane rose by 4 percent, and propane rose by 2 percent.

According to Baker Hughes, for the week ending Friday, Sept. 9, the natural gas rig count increased by 4 to 92. The number of oil-directed rigs rose by 7 to 414.The total rig count climbed by 11, and now stands at 508.

Pizza company stocks
Pizza stocks had a very profitable week, with the small take-and-bake chain, Papa Murphy’s, skyrocketing in value over the course of the week, rising a whopping 47 cents of its Monday price of $5.85, to close the week at $6.32

The larger chains also did well last week, with Domino’s closing Friday at $150, up from $147.40 at the start of the week. Meanwhile, Pizza Hut parent, Yum! Brands, closed up slightly to $88.01, up from $87.13 at the opening bell last Monday. 
 
Finally, Louisville-based Papa John’s ended the trading week at $77.70, up from $74.62 at the start of the week. 

About S.A. Whitehead

---

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.