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Commodities: Papa John's price gains, gas prices fall

Commodity prices for pizza restaurateurs were split, with some indications that rising cheese prices may be coming as demand strengthens. Meanwhile, most of the publicly traded brands monitored by this site fell in value, aside from Papa John's, which rose slightly just a day before the brand's earnings call Nov. 6.

November 5, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

While most pizza stocks fell in value over the last trading week, the beleaguered Papa John's brand gained slightly last week in value, going into the brand's Tuesday earnings call. On the pizza restaurant commodities front, last week was an even split between up and down prices for the four major pizza operation necessities monitored by this site. 

Cheese

Barrels closed at $1.34 and 40-pound blocks at $1.4575 at the close of the markets Friday. The weekly average for barrels was $1.3050 (up 0.07) and blocks, $1.4830 (flat), according to the U.S.D.A.

As cheddar block markets decline, and barrel prices increase, the recently large market price gap dwindled last week. Demand was steady to up, depending on region. Mozzarella and provolone producers in the East report retail and food service demand is strong. 

Cheese supplies vary by location, but barrel and mozzarella supplies are heavier according to Midwestern and Western contacts. Some Eastern cheese producers plan to grow current inventories. 

Wheat

Compared to last week, cash bids for wheat were higher, according to the U.S.D.A. Last week's export sales of wheat totaled 21.4 million bushels, higher than recent amounts. Total wheat exports are down 21 percent in 2018-19 from last year. 

Wheat was 5 to 46 cents higher. Kansas City U.S. No. 1 Hard Red winter, ordinary protein rail bid was 44 3/4 cents higher, from $6.16 1/4-$6.31 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 21 to 46 cents higher, from $4.68-$5.33 per bushel.

Minneapolis and Duluth U.S. No.1 Dark Northern spring, 14.0 to 14.5 percent protein rail, was 37 1/4 cents higher, at $6.96 3/4 per bushel. Portland U.S. Soft White wheat rail was 5 cents higher, from $6.10-$6.22 per bushel.

Vehicle fuel

Unless your brand's delivery vehicles run on diesel, the last few weeks have been pretty good for you at the pump and that trend continued last week as prices for gas and E85 continued to drop slightly. Diesel, on the other hand - though down from a hair from last week - is still a couple of cents higher than last month at $3.27 on average, according to AAA. 

Regular gasoline was selling for $2.76 a gallon this week, down a smile-inducing 15 cents from the price a month ago, while midgrade and premium followed suit, though not as dramatically. Midgrade  was selling for $3.08, down from $3.20 last month, while premium averaged $3.33, down 12 cents from last month. Finally, E85 was down about 11 cents this morning to settle in at $2.36, on average. 

Natural gas

Natural gas spot prices fell at most locations the report week ending, Wednesday, Oct. 31. Henry Hub spot prices fell from $3.36 per million British thermal units (MMBtu) to $3.29/MMBtu over that period, according to the U.S. Energy Information Administration.

At the New York Mercantile Exchange, the November 2018 contract expired Oct. 29 at $3.185/MMBtu. The December 2018 contract price increased to $3.261/MMBtu, up 3 cents/MMBtu Wednesday to Wednesday.

Net injections to working gas totaled 48 Bcf for the week ending Oct. 26. Working natural gas stocks are 3,143 Bcf, which is 17 percent lower than the year-ago level and 17 percent lower than the five-year (2013-17) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 66 cents/MMBtu, averaging $7.95/MMBtu for the seven days ending Oct. 31. The price of natural gasoline, ethane, propane, butane and isobutane all fell, by 6, 11. 7, 7 and 5 percent, respectively.

According to Baker Hughes, for the seven days ending Tuesday, Oct. 23, the natural gas rig count decreased by one to 193. The number of oil-directed rigs rose by two to 875. The total rig count increased by one, and it now stands at 1,068. This count is the highest total rig count since March 2015.

Pizza company stocks

Domino's dropped again this week, down another $2.45 from the previous week's close to settle in at $265.30 at the closing bell Friday. Meanwhile, the parent company of competitor Pizza Hut, Yum Brands also fell in  value last week, closing at $86.90 Friday, down from $89.40 the previous week's close. 

Papa John's, which is set to disclose its financials tomorrow, Nov. 6, gained over the week, up $2.70 to close Friday at $54.94. But smaller take-and-bake brand, Papa Murphy's fell in value over the week, closing Friday at $4.65, down 8 cents from the previous week's close. 

A note to pizza restaurateurs: Would you like too see additional commodity or pizza stock price listings? Please email your preferences to Pizza Marketplace editor Shelly Whitehead at shellyw@networldmediagroup.com. 

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.