Operations

On the cusp of Pizza Day, Valentine's Day, love for the pie is high

Despite the pizza commodities "Grinch" of ever-escalating gas prices, last week was a pretty good one for the country's leading publicly traded pizza companies.

Investors and most commodity producers were fairly kind to pizza restaurant companies last week. (Photo: iStock)

February 8, 2021 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza restaurant investors wrapped up the week before Super Bowl Sunday, as well as National Pizza Day on Tuesday, showing all kinds of love for the almighty pie. Of the four publicly traded pizza companies Pizza Marketplace watches weekly, only Papa John's suffered a loss last week, when the company's value dropped 48 cents to close Friday at $101.80.

But it was a buying bonanza for the other three restaurant companies, particularly Pizza Inn and Pie Five parent, Rave Restaurant Group, which saw its value soar more than 40 cents at one point mid-week to $1.46, before settling at $1.23 Friday after reporting sales declines in its second-quarter financials. It finished 19 cents above the previous Friday's close, however.

At Domino's Pizza, gains were also made across the five days of trading, sending the stock price up $6.47 for the week to close Friday at $377.23. Likewise, multi-QSR company and Pizza Hut parent, YUM Brands, saw gains, sending the company's stock price up to $105.34 — up $3.85 from the previous week's close.

Cheese

On the Chicago Mercantile Exchange, barrels closed Friday at $1.50, while 40-pound block rang in at $1.64 at the end of trading Friday. The weekly average for barrels was up 3 cents to just under $1.43, while blocks were off nearly a penny to an average of $1.58.

The U.S. Department of Agriculture reported that cheese production was busy nationwide, as cheesemakers worked through plentiful milk supplies. Nonetheless, cheese demand varied from one region to the next.

Curd producers in the Midwest have given positive notes in recent weeks regarding demand as some restrictions have eased. However, foodservice demand across the country remained soft, particularly when compared with pre-COVID-19 figures.

Cheese inventories ranged from widely available to balanced, depending on variety and/or location. Cheese market tones varied from blocks to barrels. Blocks slid, while barrels have been steady to slowly increasing on the Chicago Mercantile Exchange, the U.S.D.A. said.

Wheat

Chicago Board of Trade soft red winter wheat futures dropped 22 cents to end at $6.41 per bushel (/bu), while on the Minneapolis Grain Exchange, hard red spring wheat futures were down 7 cents to $6.26/bu, the U.S.D.A. reported. Kansas City Board of trade prices for hard red winter wheat futures were down 13 cents to $6.25/bu.

Commercial sales of wheat were up 69% from the previous week to 643,000 metric tons (MT) for 2020/21 delivery. For the year up to this date, commercial sales of wheat are 5% ahead of last year, at 22.4 million metric tons

Auto Fuel

Pizza restaurateurs got something of a booby prize from the oil companies last week when — for the first time in many months —the average price of a gallon of regular unleaded gas actually surpassed what it had been a year earlier at this time. This morning, the national average for a gallon of regular is just under $2.47, 3 cents higher than what we paid last year at this time. It's really a continuation of an upward trend in pump prices that's been playing out for several weeks, despite a slight drop in gas demand from 7.83 million barrels a day (b/d) to 7.78 last week, according to new data from the U.S. Energy Information Administration.

At the close of Thursday's formal trading session, the price of West Texas Intermediate increased by 54 cents to settle at $56.23, which is the highest settlement price of the year. Crude prices rose last week after the Organization of the Petroleum Exporting Countries and its production reduction agreement partners met to review compliance with their agreement to collectively reduce their crude production by 7.2 million b/d. The group decided to hold the cuts steady, according to the American Automobile Association.

OPEC said output will remain low this year, since demand was forecasted to be lower than expected throughout 2021 due to ongoing crude demand concerns as the pandemic continues to keep travel restrictions in place. Crude prices have also been bolstered by the Energy Information Administration's latest report showing that total domestic crude inventories dropped by 1 million barrels (bbl) the previous week. The current level now sits at 475.7 million bbl.

An increase in crude utilization and increasing crude prices have and will continue to contribute to higher pump prices for drivers throughout the month, AAA said. The 10 states with the biggest gas price increases include Florida (up 10 cents), as well as Utah and Idaho ( up 5 cents), then finally Wisconsin, Louisiana, Rhode Island and California (all up 4 cents).

Aside from that current average for regular of nearly $2.47 – a nickel increase from the previous week – mid-grade ($2.79) and premium ($3.06) were up 4 cents and 5 cents, respectively. At just under $2.70 a gallon, diesel was up 6 cents from the previous week, while E85 averaged $2.16, up 3 cents from the previous week.

Natural gas

Natural gas spot prices rose at most locations for the seven days that ended Feb. 3. The Henry Hub spot price rose from $2.71 per million British thermal units (MMBtu) to $2.91/MMBtu over the same period.

At the New York Mercantile Exchange, the February 2021 contract expired last Wednesday at $2.76/MMBtu. The March 2021 contract price increased to $2.79/MMBtu, up 9 cents/MMBtu. The price of the 12-month strip averaging March 2021 through February 2022 futures contracts climbed 4 cents/MMBtu to $2.93/MMBtu, according to the U.S. Energy Information Administration.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 38 cents/MMBtu, averaging $7.51/MMBtu for the week ending Feb. 3. The prices of natural gasoline, propane, butane, isobutane, and ethane all rose, by 3%, 3%, 5%, 8%, and 11%, 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.