Article
Commodities: Prices for pizza-makers rise, but so do most pizza stocks
The overall production tab for pizza restaurateurs took a hit last week in commodities trading when just about every basic need in the pizza-making and delivery process increased over the course of the week.
January 16, 2017 by S.A. Whitehead — Food Editor, Net World Media Group
The overall production tab for pizza restaurateurs took a hit last week in commodities trading when just about every basic need in the pizza-making and delivery process increased over the course of the week. The bright spots in this week's commodities report, however, came from the declining prices of natural gas products, as well as the growing value of all but one pizza stock monitored by this site.
Cheese
After spending most of last month in free fall, cheese prices began increasing last week, managing to hit a closing price on Friday of $1.73. That's essentially back up to early December prices, and 6 cents higher than the closing price at the end of trading the previous Friday, when cheese went for $1.67.
Wheat
Wheat prices for the week were steady to mostly higher, according to the U.S. Department of Agriculture's market reporting services. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 18 1/4 to 25 1/4 cents higher, from $4.54 3/4 to $5.49 3/4 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 steady to 2 cents higher from $4.16 to $4.23 per bushel.
Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14. to 14.5 percent protein rail, was 28 3/4 to 33 3/4 cents higher, from $6.99 to $7.09 per bushel. Portland U.S. Soft White wheat rail was steady from $4.56 to $4.71 1/4 per bushel.
Gasoline and diesel fuel
Gas and diesel fuel costs continue to be a problem spot for pizza restaurateurs who are having to cope with far higher prices than this time last year and fairly substantial price increases from just last month across all grades. The only good news is that the prices appear to be down a couple of cents from this time last week.
This morning the current average price for regular was $2.34, down about 3 cents from last week, but still up 9 cents from last month and a whopping 43 cents from this time a year ago. The same trend is continued across grades, to mid-grade, selling this morning for $2.60, as well as premium ($2.84 this morning) and diesel ($2.53 this morning). All three grades are up 40 cents or more from this time last year, and about a dime from last month.
Natural gas
Natural gas spot prices fell at most locations this report week (Jan. 4-11). The Henry Hub spot price fell from $3.37 per million British thermal units (MMBtu) Jan. 4, to $3.28/MMBtu on Jan. 11. At the New York Mercantile Exchange, the February 2017 contract fell 4 cents, from $3.267/MMBtu Jan. 4 to $3.224/MMBtu Jan.11. Prices generally decreased across all regions as the week began with extremely cold polar vortex weather, which peaked on Friday, and then temperatures moderated through yesterday.
Net withdrawals from working gas storage totaled 151 billion cubic feet (Bcf) for the week ending Jan. 6. Working natural gas stocks are 3,160 Bcf, which is 10 percent less than the year-ago level and nearly the same as the five-year (2012–16) average for this week.
The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 27 cents, closing at $6.87/MMBtu for the week ending Jan. 6. The price of ethane, butane, and isobutane fell by 12, 16, and 4 percent, respectively. The price of natural gasoline and propane both rose by 3 percent.
Demand continues to increase because of cold winter temperatures. Total U.S. consumption of natural gas rose by 27 percent, compared with the previous report week, according to data from PointLogic. Overall, weather for this report week was colder than the previous week. Average temperatures in the Lower 48 states fell 6 degrees on the week and averaged 37 degrees. Temperatures in most regions were above the normal levels for the period, with the exceptions of the Pacific and Mountain regions.
Pizza company stocks
The news for most pizza stocks was fairly positive last week on the stock market, where all but Papa John's managed to grow in value.
Domino's Pizza closed Friday at $167.16, up $3.61 from the opening bell on Monday when the stock was going for $163.45. Pizza Hut parent, Yum Brands also grew over the course of the week up from $64.49 at the open of trading on Jan. 9, to $64.66 at Friday's close.
Papa John's was th only of the four stocks monitored here that dropped last week, down 59 cents between the Monday open and Friday's closing bell when it sold for $84.84.
Take-and-bake chain, Papa Murphy's, managed to pull out a slight gain last week, growing from $4.37 at the open on Monday, to $4.44 at Friday's close.
Photo: iStock
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.
