Commodities: A (kinda) Happy New Year for pizza prices

| by S.A. Whitehead
Commodities: A (kinda) Happy New Year for pizza prices

The first week of trading for 2017 brought mostly better news for pizza restaurateurs, who had a brutal end-of-year week on the markets for 2016. But with the new year, stock prices recovered for about half of the brands monitored by this site, and major commodity prices brought some good news along with the continuing saga of escalating auto fuel prices. 

Cheese prices, after falling somewhat precipitously since November, appear to be flattening out. In fact, between last Monday morning and Friday at the close of business, the price remained $1.67, up just a penny from the previous Friday's close.

Wheat was mostly 11-27 cents higher, according to the USDA Agricultural Marketing News Service. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 19 1/4 cents higher from $4.36 1/2 to $5.24 1/2 per bushel. Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted. St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 24 to 27 cents higher from $4.16 to $4.21 per bushel.  

Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 5 1/4 to 10 1/4 cents lower from $6.70 ¼ to $6.75 1/4 per bushel. Portland U.S. Soft White wheat rail was 11 to 15 1/4 cents higher from $4.56 to $4.71 1/4 per bushel.

Gasoline and diesel fuel
Here's a sobering flashback fact for you: This time last year the average price of a gallon of regular was going for about $1.98. This morning, however, that same gallon was costing on average, about $2.37. 

That's up 3 cents from last week and 17 cents from last month, so the trend is clearly upward on auto fuel prices, since that same level of increase is seen across other grades, including mid-grade which was priced $2.62 this morning and premium, which was at $2.85. 

For diesel fuel, the price increases have been less substantial, but still very much a fact of life at the moment. The average price of diesel this morning was $2.53, up 11 cents from last month and 32 cents from last year when diesel sold for about $2.22 a gallon. 

Natural gas
Natural gas spot prices fell at most locations during the latest released report week ending Dec. 21. The Henry Hub spot price fell from $3.52 per million British thermal units (MMBtu) last Wednesday to $3.48/MMBtu yesterday. At the New York Mercantile Exchange (Nymex), the January 2017 contract remained flat Wednesday to Wednesday at $3.542/MMBtu. 

Prices generally decreased across all regions as this week's temperatures recovered from the polar vortex conditions, which supported price increases last week. The largest price decreases occurred in the Northeast region.

Net working gas withdrawals from storage totaled 209 billion cubic feet (Bcf) for the week ending Dec. 16. Working gas stocks stand at 3,597 Bcf, which is 2 percent above the five-year (2011–15) average for this week and 6 percent below last year at this time.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 18 cents, closing at $6.54/MMBtu for the week ending Dec. 16. The price of natural gasoline, ethane, butane, and isobutane fell by 2, 2, 1 and 15 percent respectively. The price of propane rose by 1 percent.

Total U.S. consumption of natural gas rose by 11 percent, compared with the previous report week, according to data from PointLogic. Power burn climbed by 10 percent week over week, while industrial sector consumption increased by 3 percent. In the residential/commercial sector, consumption increased by 15 percent. Natural gas exports to Mexico increased 9 percent.

Pizza company stocks 
Pizza stocks were split after the dismal results from the end of 2016 for all the brands monitored by 

Good news greeted both Domino's and Pizza Hut parent, Yum Brands, in 2017's first week of trading. Domino's value increased $2 between the open of trading last Tuesday and the close Friday afternoon, when the stock brought $163.49. 

Pizza Hut parent, Yum Brands also saw a nice increase in value last week, ending the week at $64.42, up 49 cents from its opening price at the week's start of $63.93. 

Meanwhile, bad news continued for Louisville-based Papa John's, which experienced a loss of $1.24 total between the 2017 opening of trading and the close of the first week of stock market wagering on Friday when the stock had dropped to $86.01.

Finally, Papa Murphy's lost value and mostly all of it on last Friday when word came of a CEO change at the brand.Upon that news, the stock dropped precipitously Friday morning but then stabilized some, closing the week at $4.36, down 7 cents from Monday's opening bell. 

Topics: Business Strategy and Profitability, Financial News

S.A. Whitehead

Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of and after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.

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