Food & Beverage

Domino's, Papa John's, Rave falter in tough trading week

Building pizzas got a bit costlier last week, but delivering them remains a deal, thanks to higher wheat and cheese prices and steadily lower gas prices.

Photo: iStock

October 26, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

With cheese and wheat prices on the upswing and most pizza restaurant companies experiencing a dip in values last week, the weekly commodities report leaves much to be desired.

Of the four major publicly traded pizza companies monitored by Pizza Marketplace, only Pizza Hut parent, Yum Brands, saw any upward movement in trading value on the New York Stock Exchange over the five days of buying and selling. Yum Brands traded up, closing Friday at $101.28, up $2.75 from the prior week's close of $98.53.

The rest of the pizza players had tougher times last week, beginning with Domino's Pizza which closed Friday at $394.10, down $5.35 from the previous week's close. Papa John's also had a less than optimal week, when that Louisville, Kentucky-based company traded down last week to come in Friday at the close of markets at $76.74, off $4.96 from the previous week's close.

Finally, the smaller two-brand pizza company, Rave Restaurant Group, also dropped in value. The Pizza Inn and Pie Five parent was down 6 cents over the week when markets closed Friday and the company's trading value locked in at 68 cents for the week.

Cheese

Barrels closed at $2.46 last Friday on the Chicago Mercantile Exchange, while blocks came in at $2.77. Both quantities trended up in value on average last week when the average price of barrels came in 17 cents higher at $2.34. The average price paid for 40-pound blocks last week was up nearly 4 cents to $2.75.

The U.S. Department of Agriculture said that nationwide, cheese production rates are healthy, though pandemic-related quarantines for some Midwest plant employees have some processors working with lighter crews.

Retail demand is strong ahead of the holiday season. Cheese inventories are reportedly tight on the barrel side, with barrels reportedly balanced to somewhat tighter amidst a bullish cheese market.

Wheat

The continuation of dry weather in the U.S. wheat-producing states is keeping wheat prices overall nationally on the upswing, beginning with December Kansas City hard red winter futures, which gain nearly 11 cents last week to post at $6.345.

December Chicago soft red winter wheat gained $11.75 in value last week to also come in at $6.345. And on the Minneapolis Grain Exchange, spring wheat futures gained 1.5 cents to post at $5.76.

Auto fuel

Auto fuel continues to be a bright spot on the pizza restaurateur's commodities expense sheet, as the price of gas remains in a downward price cycle, thanks to lessened pandemic-era demand for the fuel. The price for a gallon of regular remained flat throughout last week at $2.16, which is a penny lower than last week's average and 2 cents under what motorists paid a month earlier, the American Automobile Association said.

The U.S. Energy Information Administration said gas demand fell from 8.58 million barrels a day (b/d) to 8.29 million b/d. AAA said that as demand remains low, American drivers should expect pump prices to continue to decline this fall.
Nationally, the biggest price changes on the week were found in Kentucky (+5 cents), along with Washington, D.C. and Delaware which both averaged 5 cents lower than the week before.

The average price of a gallon of midgrade this morning was $2.16, which is just shy of 3 cents lower than last week. But one year ago at this time, we paid just short of $2.61 a gallon. Mid-grade ($2.51) and premium ($2.78) were flat over the week, but down 3 cents and 2 cents over the month, respectively.

At an average nationally o $2.37 a gallon, diesel was only several tenths of a cent under the price paid a week ago, while at $1.98, E85 was actually up 2 cents over its average price a week earlier.

Natural gas

Natural gas spot price movements were mixed for the seven-day period that ended on Oct. 21, according to the U.S. Energy Information Administration. The Henry Hub spot price rose from $2.03 per million British thermal units (MMBtu) to $2.86/MMBtu over that period.

At the New York Mercantile Exchange, the price of the November 2020 contract increased 39 cents from over the period, to $3.02/MMBtu, marking the first time the near-month natural gas futures price reached $3/MMBtu since January 2019. The price of the 12-month strip averaging November 2020 through October 2021 futures contracts climbed 13 cents/MMBtu to $3.13/MMBtu.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 17 cents/MMBtu, averaging $5.23/MMBtu for the period. The price of natural gasoline fell by 3%. The prices of ethane, propane, butane, and isobutane rose by 12%, 3%, 1% and 1%, respectively.

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.