Commodities: Soaring gas prices rock pizza restaurateur's delivery-centric world

| by S.A. Whitehead
Commodities: Soaring gas prices rock pizza restaurateur's delivery-centric world

The breaks that pizza restaurateurs are getting on commodities like cheese and wheat are likely being "eaten up" by surging vehicle fuel and natural gas prices. AAA reports that the price for the average gallon of unleaded regular has soared to more than $2.70, with six West Coast states reporting prices higher than $3 a gallon. That's up some 30 cents from last year and nearly 20 cents from a month ago. 

Cheese
Cheese prices have stayed relatively flat for the whole month of April and that certainly holds true for last week's values on the pizza restaurateur's staple. The average price at the close of trading Friday was $1.6025, down just a half-cent from the previous week's close, remaining where the value has been hovering since the month started. 

Wheat
Cash bids for wheat were mostly lower, last week, according to the U.S.D.A. Wheat sales were a negative 2.5 million bu on old crop from cancellations, and also on the light side for new crop with 8.8 million bu.  

Wheat ranged from 13 cents lower to 5 1/4 cents higher, with Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid at 6 1/4 cents lower, from $5.85 1/4-$6.00 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 lower, from $4.69-$4.80 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 5 1/4 cents higher at $7.73 1/4 per bushel.  Portland U.S. Soft White wheat rail was 1 to 2 cents lower, from $5.80-$5.90 per bushel.

Vehicle fuel

Natural gas
Natural gas spot prices rose at most locations for the report week ending on April 18. The Henry Hub spot price rose from $2.69 per million British thermal units (MMBtu) to $2.84/MMBtu over that period. At the New York Mercantile Exchange, the May 2018 contract price rose 6 cents, from $2.675/MMBtu to $2.739/MMBtu in that time.

Net withdrawals from working gas totaled 36 billion cubic feet (Bcf) on April 13. Working natural gas stocks are 1,299 Bcf, which is 38 percent lower than the year-ago level and 26 percent lower than the five-year (2013-17) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 33 cents, averaging $7.57/MMBtu for the week ending April 18. The price of natural gasoline, propane, butane, and isobutane rose by 3, 7, 5 and 6 percent, respectively. The price of ethane remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, April 10, the natural gas rig count decreased by two to 192. The number of oil-directed rigs rose by seven to 815. The total rig count increased by five, and it now stands at 1,008. 

Pizza company stocks
Domino's rebounded last week at the New York Stock Exchange, gaining $8.61 in value over the course of five days trading, to end the week Friday at $238.93. Competitor Yum Brands, parent of Pizza Hut, also saw a bump in value, albeit not as substantial. The company's stock last week rose to $86.29 from the previous Friday's close of $85.42.

Papa John's also saw a slight bump in value in trading on the NASDAQ last week, growing from $61.05 April 13 to $61.62 at the close on April 20. In fact, the only loser last week of the brands monitored by this site, was Papa Murphy's which dropped 48 cents in value for the week when it closed last Friday $4.57.

Photo: iStock


Topics: Business Strategy and Profitability, Cheese, Delivery, Dough, Financial Management, Financial News, Pizza Toppings, Trends / Statistics



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 Pizzamarketplace.com and QSRweb.com 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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