Article
Commodity prices up, stock values down: Spring starts on sour note for most pizza brands
The first week of spring brought higher prices for all the basic pizza commodities and — aside from Papa John's — lower stock values for the brands monitored by Pizza Marketplace.
March 25, 2019 by S.A. Whitehead — Food Editor, Net World Media Group
In a rare week for commodity prices, all of the major staples of the pizza restaurateur's pantry were up in price this past week, while all but one of the publicly traded pizza brands monitored here weekly dropped in value. The good news though is that spring also sprang last week, bringing the potential for more warm weather business in coming days.
Cheese
In cheese trading last week, the weekly average for barrels was up a penny at $1.54, while blocks were up about 4 cents to an average trading price of $1.58 on the week. Barrels and 40-pound blocks both closed at $1.57, according to the U.S.D.A. Agricultural Marketing Service.
Barrel markets have been rising in price, with the potential to close the long-running gap with the Chicago Mercantile Exchange block price. Barrel and curd producers in the Midwest are reporting positive sales numbers and near-future demand growth, along with balanced inventories.
Northeast and Western cheese demand reports show overall stability and cheese production is steady to increasing nationwide. Eastern contacts suggest their cheese stores are steady to growing, while Western cheesemakers say demand has been stable enough that they have allayed some of their concerns about long inventories.
Overall, cheesemakers are hopeful regarding spring. Holidays, basketball playoffs, more grilling and all the outdoor and community events ushered in with nicer weather are some of the demand-related benefits of the season.
Wheat
Compared to last week, cash bids for wheat were also mostly higher, the U.S.D.A. Agricultural Marketing Service said. Export sales for the week ending March 14, totaled 7.2 million bushels of wheat, with wheat prices ranging from steady to 58 3/4 cents higher.
Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 19 1/2 cents higher, from $6.07-$6.22 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 13 cents higher at $4.94 per bushel.
Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 58 3/4 cents higher at $7.51 1/4 per bushel. Portland U.S. Soft White wheat rail was steady, from $5.90-$6.30 per bushel.
Vehicle fuel
Ah, the start of spring and the smell of gas is, of course, in the air as Americans pack in the car and head somewhere else. And that means pizza restaurateurs are paying more at the pump, along with everyone else. In fact, now we're actually paying at the very least a couple of cents more per gallon than we did last year at this time for all types of fuels, according to records reported by the American Automobile Association.
The average price of a gallon of regular today was up to $2.63, about 2 cents above last year's price at this time. That trend was echoed across gas grades and fuel types, as well. Mid-grade ($2.92) and premium ($3.14) were both 3 cents higher than last year's price, while diesel ($3.02) was up 8 cents from last year's average and E85 ($2.30) averaged 10 cents higher than what we paid last year at this time.
Natural gas
For the seven-day period that ended on Wednesday, March 20, natural gas spot prices were up, with Henry Hub spot prices rising from $2.81 per million British thermal units (MMBtu) to $2.83/MMBtu over that period, according to the U.S. Energy Information Administration. At the New York Mercantile Exchange, the price of the April 2019 contract was unchanged over those seven days at $2.82/MMBtu. The price of the 12-month strip, averaging April 2019 through March 2020 futures contracts, remained the same at $2.970/MMBtu.
Net withdrawals from working gas totaled 47 billion cubic feet (Bcf) for the week ending March 15. Working natural gas stocks are 1,143 Bcf, which is 22 percent lower than the year-ago level and 33 percent lower than the five-year (2014-18) average for this week.
According to Baker Hughes, for the seven days ending on March 12, the natural gas rig count remained flat at 193. The number of oil-directed rigs fell by one to 833. The total rig count decreased by one, and it now stands at 1,026.
Pizza company stocks
With the addition of Shaquille O'Neal last week to its board and as brand ambassador, Papa John's was the only pizza stock regularly monitored by Pizza Marketplace to gain in value last week. The stock ended Friday at $49.80, up $2.60 from the previous week's close of $47.20.
Domino's continued to drop down nearly to its late December 2018 prices by closing Friday at $239.25, off $5.02 from last week's close.
Also on the New York Stock Exchange, Pizza Hut parent company, Yum Brands, was similarly taken down a notch after hitting $100 for the first time in that stock's history on March 15. The stock closed Friday at $98.97, off $1.93 from that previous Friday close of $100.90. Papa Murphy's value also took a tumble last week to close Friday at $5.47, down 39 cents from the previous Friday's close.
Photo: Span via Creative Commons
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.
