Article

Commodities: Another profitable week for pizza operators

Aside from stabilizing auto fuel prices and slightly rising natural gas prices, last week was a particularly rosy one for pizza restaurateurs' bottom lines.

September 26, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

It was yet another profitable week for pizza operators, at least from the standpoint of commodity and stock prices, with cheese and wheat prices continuing to fall, while auto fuel prices appear to be stabilizing and natural gas prices starting to climb as we officially enter fall. 

Cheese:
Cheese prices continue to plummet, down 9 cents from the previous week to $1.56 at the close of business Friday. That's down from $1.71 two weeks ago and $1.65 on Sept. 16. 

Wheat:
According to the U.S. Department of Agriculture in Minneapolis, wheat prices for trading ending Sept. 22 continued to be lower or mixed on some grades. Milling wheat prices were mixed, but mostly higher this past week. But demand continued to be light as most mills are full from wheat being applied on contract.

Domestic prices for soft red winter and hard red winter classes climbed moderately through mid-August before dropping in the latter half of the month. Global quality concerns and reluctant farmer selling led to the initial strengthening of prices, but ample global supplies have pressured prices lower. 

Gasoline and diesel fuel:
Gas and diesel fuel prices appear to be leveling off, with the current price of regular at $2.21, the same as last week and last month, but about 9 cents lower than a year ago, when it was $2.29. The same is the case for mid- and premium-grade gas, with mid-grade going for $2.47 and premium at $2.71 a gallon. Those prices are roughly the same or a penny less than last week and last month, and about a dime lower than last year at this time. Diesel fuel is also stabilizing, but well below last year’s price of $2.50 a gallon, and currently selling about 14 cents a gallon lower than last year at $2.35.

Natural gas:
For the week ending Sept. 21, natural gas spot prices rose at most locations. The Henry Hub spot price rose from $3.04 per million British thermal units last Wednesday to $3.14/MMBtu yesterday. At the New York Mercantile Exchange, the October 2016 contract rose 17 cents from $2.889/MMBtu last Wednesday to $3.057/MMBtu yesterday.

Net injections to working natural gas storage totaled 52 Bcf for the week ending Sept. 16. Working gas stocks are 3,551 Bcf, which is 4 percent more than the year-ago level and 8 percent more than the five-year (2011–15) average for the week.The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 19 cents, closing at $5.02/MMBtu for the week ending Sept. 16. The price of natural gasoline fell by 1 percent. The price of ethane, propane, butane, and isobutane rose by 8, 3, 2, and 9 percent, respectively.

According to Baker Hughes, for the week ending Friday, Sept. 16, the natural gas rig count decreased by 3 to 89. The number of oil-directed rigs rose by 2 to 416. The number of miscellaneous rigs went down by one during the week. The total rig count dropped by 2, and now stands at 506.

Pizza company stocks:
The four major pizza companies all had a very good week in trading last week. Domino's gained on the week about 27 cents per share, to close at $154.35 on Friday. Yum! Brands, parent of Pizza Hut, also gained to close at $90.67, up from $89.93 at the start of the trading week. 

Papa John's soared up in value over the five trading days as well, gaining nearly a dollar from Monday through Friday to close at $82.16 Friday. The previous trading week's big winner, Papa Murphy's, also continued to rise in value, though not as dramatically. The stock closed at $6.75 Friday, up 15 cents from its Monday starting price. 

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.