Article

Papa John's continues on a "roll" with traders last week

It was a relatively dismal trading week for all but one of the nation's publicly traded pizza brands, but gas prices are giving operators a break at the store level.

Photo: iStock

January 27, 2020 by S.A. Whitehead — Food Editor, Net World Media Group

Unless the sign on the door of your publicly traded U.S. pizza brand says "Papa John's," you probably had little to celebrate this weekend after what was a generally lousy week in trading for all but one of the nation's four pizza brands listed on the stock market.  

But the good news is that the reemerging Louisville-based brand is continuing its winning streak with investors, last week alone posting a gain of $1.47 over the five days of trading to close Friday at $66.53. While still well below the $88.36 that the stock fetched in November 2016, that price is also substantially higher than the $39.81 the stock hit in December 2018 in the thick of its issues with founder John Schnatter. 

In light of those kinds of swings, the three other publicly traded brands' losses over the last week seem less worrisome, albeit nothing to cheer about, starting with Pizza Hut parent, Yum Brands, down 42 cents on the week to close at $104.98.

Pizza giant Domino's also fell in value, posting a loss over the five days of trading of $1.37, to close Friday at $285.10. Smaller double-brand pizza company Rave Restaurant Group — parent of Pie Five and Pizza Inn — also lost some of its riches on the market last week, falling to $1.58 at the close Friday, 3 cents from the previous week's close. 

Cheese

If pizza operators were looking for some better news in the cheese markets, they were sadly disappointed as prices for barrels and blocks sailed upward last week, according to the U.S. Department of Agriculture. 

Blocks averaged $1.99, which is 9 cents higher on the week, while the average price of barrels on the Chicago Mercantile Exchange averaged 10 cents higher at $1.62 last week. Closing prices for barrels was $1.61, while 40-pound blocks closed at $2, the U.S.D.A. said. 

Some Midwestern barrel cheese-mongers told the U.S.D.A. that steady demand has kept their inventories in check regionally and that they are, in fact, now off-loading holiday-produced inventories. Cheese market tones are gaining a bit after a sort of erratic start to this year, with block prices this week passing that $2 mark after the block-over-barrel price gap reached more than 40 cents last week. The question now for both producers and consumers of cheese is whether block prices will fall, barrel prices increase or a mix of the two, leaving the market somewhat uncertain. 

Wheat

Cash bids for wheat were mostly higher on the week, while export sales showed an increase of 25.6 million bushels for 2019-20. The U.S.D.A. reported that wheat ranged from 2 1/2 cents lower to 20 1/2 cents higher, with Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid down 2 1/2 cents, from $5.67 1/4-$5.77 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 15 cents higher at $6.51 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 10 1/2 to 20 1/2 cents higher, from $6.60 3/4-$6.90 3/4 per bushel. Portland U.S. Soft White wheat rail was steady to 5 cents higher, from $6.20-$6.30 per bushel.

Vehicle fuel

The U.S. Energy Information Administration reported that total domestic stocks of gasoline continued to grow last week by 1.7 million barrels, bringing the current total to 260 million bbl. The current level is in line with the level seen in mid-January 2019. 

Gasoline demand grew slightly from 8.56 million b/d to 8.66 million b/d last week, but the current level is lower than last year's 8.87 million b/d at this same time. The American Automobile Association reports that the combination of increased stocks and low demand are helping stabilize the national average and will likely lead to lower pump prices in the future.

The current average price for a gallon of unleaded regular in the U.S. is $2.52, AAA said. That's down 3 cents from last week and 4 cents from the previous month. That same general trend continued across to the average price paid for mid-grade ($2.86), premium ($3.12) and even diesel ($2.97) and  E85 ($2.27).  

Natural gas

Natural gas spot prices fell at most locations the seven days ending on Jan. 22, with the Henry Hub spot price down from $1.98 per million British thermal units (MMBtu) to $1.89/MMBtu.

At the New York Mercantile Exchange, the price of the February 2020 contract decreased 22 cents, from $2.12/MMBtu to $1.905/MMBtu over that period. Tuesday's contract price of $1.90/MMBtu was the lowest price for a February contract since 1999. The price of the 12-month strip averaging February 2020 through January 2021 futures contracts declined 13 cents/MMBtu to $2.156/MMBtu.

The net withdrawal from working gas totaled 92 billion cubic feet (Bcf) for the week ending Jan. 17. Working natural gas stocks totaled 2,947 Bcf, which is 23% more than the year-ago level and 9% more than the five-year (2015–19) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 15 cents/MMBtu, averaging $4.90/MMBtu for the seven days ending Jan. 22. The prices of ethane, propane and butane fell by 8%, 7% and 2%, respectively. The prices of natural gasoline and isobutane rose by 1% and 5%, respectively.

According to Baker Hughes, for the seven days ending Tuesday, Jan. 14, the natural gas rig count increased by one to 120. The number of oil-directed rigs rose by 14 to 673. The total rig count increased by 15, and it now stands at 796.

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.