Article

Pizza commodities: Costlier to create, but cheaper to deliver

Key ingredients used in pizza creation were all priced higher on the markets last week, though the cost of delivery was cheaper thanks to falling gasoline prices. Pizza stocks were mixed.

June 20, 2016 by S.A. Whitehead — Food Editor, Net World Media Group

Last week on the markets, just about all prices were up for commodities used to make pizza industry products, though the industry got a break on the gas prices used to deliver those commodities and the pizzas made with them. Meanwhile pizza stocks were split for the week, with Pizza Hut and Domino's both increasing in value, while Papa John's and Papa Murphy's both fell. 

Cheese
For the second week in a row, block cheese prices increased four more cents last week on the Chicago Mercantile Exchange. Prices were $1.52 Monday and Tuesday, $1.54 Wednesday and Thursday, ending at $1.52 Friday. That's up from the previous week's prices, which began Monday at $1.46, dropped to $1.44 on Tuesday, then remained at $1.48 the rest of that week.  

Wheat
Wheat prices were up slightly to end the week at $5.40. That's up a cent from the previous week's close of $5.39 at the Minneapolis Grain Exchange.

Gasoline and diesel fuel

Monday's nationwide average for regular unleaded gasoline was $2.33, down a nickel from a week ago, according to AAA and the Oil Price Information Service. Prices are up from $2.27 a month ago, but still significantly lower than this time last year, when consumers were paying $2.80 at the pump. Mid-range unleaded is down 4 cents from last week to $2.59, while Monday's premium unleaded price was down three cents to $2.82. The nationwide average for diesel fuel is $2.37, the same as one week ago, but up 11 cents from last month. Diesel prices are substantially down from a year ago, when the price of a gallon was 49 cents higher at $2.86.  

Natural gas

Outside of the West coast and Northeast, natural gas spot prices rose at most market locations this report week (Wednesday, June 8, to Wednesday, June 15). The Henry Hub spot price continued its recent increases, rising by 29 cents from $2.33 per million British thermal unit last Wednesday to $2.62/MMBtu. At the New York Mercantile Exchange, the July 2016 contract rose from $2.468/MMBtu last Wednesday to $2.595/MMBtu, an increase of about 13 cents.

Net injections to working gas totaled 69 billion cubic feet (Bcf) for the week ending June 10. Working gas stocks are 3,041 Bcf, which is 26 percent above the year-ago level and 30 percent above the five-year (2011-15) average for the week.

According to Baker Hughes, for the week ending June 10, the natural gas rig count increased by three to 85. Oil-directed rigs increased by three to 328. This is the second consecutive weekly increase in the oil rig count. The total rig count increased by six over the week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by two cents, closing at $5.26/MMBtu for the week ending Friday, June 10. The price of natural gasoline and ethane rose 1 percent and 14 percent, respectively. These increases were offset by declines in the other plants liquids. Butane prices fell by 1 percent, and propane prices fell by 6 percent. Isobutane prices remained essentially flat.

Pizza company stocks

Shares in Pizza Hut parent Yum! Brands Inc closed Friday at $83.55, up 63 cents from the previous close of $82.92.  

Domino's was also up at $127.29 from the previous close of $126.95.

Papa John's and Papa Murphy's both fell on the week, with Papa John's down 94 percent to close the week at $65.27. Papa Murhphy's fell 36 cents from $7.54 to $7.18. 

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.