Commodities: A rocky 2016 ends with pizza stocks falling

| by S.A. Whitehead
Commodities: A rocky 2016 ends with pizza stocks falling

The last week of 2016 was brutal for most pizza stocks, which bled off significant value before the close of trading on Dec. 30. Meanwhile, the prices of major commodities for pizza restaurateurs were mixed, failing to provide much in the way of relief from the faltering stock values. 

Among the better news for restaurant operators in last year's final week of commodities trading, cheese prices continued their two-month plummet from a high in early November of $1.94 to the close of trading Dec. 30, when the price had fallen to $1.66, according to market data. 

The relief that cheese prices provided was erased, however, by rising wheat values. Nonetheless, overall the bids were running about the same as last year this time, according to the U.S.D.A.

Trading volume was light due to the holiday. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 7 1/4 cents higher from $4.17 ¼ to $5.05 1/4 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 7 to 13 cents higher, from $3.89 to $3.97 per bushel.  

Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 10 1/2 to 30 1/2 cents lower at $6.80 1/2 per bushel. Portland U.S. Soft White wheat rail was 1 to 3 cents higher, from $4.45 to $4.56 per bushel.

Gasoline and diesel fuel
Auto fuel prices last week echoed that theme, with prices significantly higher than a week or month ago, and sharply up from this time last year at the pump. The average price of regular today was $2.35, according to AAA. That's up 6 cents from last week, 18 cents from last month, and perhaps most painfully, a full 35 cents from this time last year when we were paying an average price of $1.99 for a gallon of regular.

Prices paid for mid-grade ($2.59) and premium ($2.83) told a similar story though not as dramatic, with the average gallon for each grade selling for about 14 cents more than last month and 31 cents more than last year for both grades. Meanwhile, for vehicles using diesel fuel, the price fluctuations from last month and last year were not as dramatic, with a gallon selling for $2.51, about 11 cents higher than last month and a quarter higher than this time last year. 

Natural gas
The most recent reporting week for natural gas ended Wednesday, Dec. 21, when spot prices fell at most locations. The Henry Hub spot price fell from $3.52 per million British thermal units (MMBtu) Dec. 14 to $3.48/MMBtu Dec. 21. Prices generally decreased across all regions as temperatures recovered from the polar vortex conditions, which supported price increases the previous week. The largest price decreases occurred in the Northeast region. Meanwhile, at the New York Mercantile Exchange (Nymex), the January 2017 contract remained flat Wednesday to Wednesday at $3.542/MMBtu.

Supply also remained flat, averaging 77.4 Bcf/d. But, demand continued to increase with total U.S. consumption of natural gas rising 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. 

Pizza company stocks
The news was pretty dismal for the four pizza stocks monitored by Domino's closed Dec. 30 at $159.24, a decline of $1.76 from last week.

Pizza Hut parent, Yum Brands saw its value drop from $63.76 to $63.33 over the same period, while Papa John's fell from $87.12 on Dec. 23 to $85.58 at the close of trading on Friday, Dec. 30. Finally, Papa Murphy's saw its stock value decline from $4.37 on Dec. 23 to $4.22 at the close of 2016's last day of trading Friday. 

Photo: iStock

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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