Article

Pizza brand trading proves Americans can get through anything with 'nice, hot slice or two'

As most Americans head into yet another week of stay-at-home orders, pizza trading shows investors know that for a lot of us, ordering pizza has become a key survival strategy in otherwise uncertain times, with all three of the biggest pizza brands posting another week of value gains.

Investors last week show what Americans know: A hot pie can be key to making it through pandemic restrictions. (photo: iStock)

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

The Big Three pizza companies in the U.S. headed into the start of trading today with some air underneath their wings, with Domino's, Papa John's and Pizza Hut parent, Yum Brands, all posting another week of stock value gains with their investors last week. In fact, only the smaller two-brand pizza parent company of Rave Restaurant Group started the week on the slightly poorer side when investors pulled back on the Pizza Inn and Pie Five parent last week. 

Ann Arbor, Michigan-based Domino's Pizza closed Friday at $367.29, up $4.32 from the previous week's close for that brand. The parent of Plano, Texas-based competitor, Pizza Hut, also posted modest gains on the week when Yum Brand's closed the week up $1.72 to end Friday at $85.89.

But, it was Louisville, Kentucky-based Papa John's that posted the largest relative leap in value over last week's trading when Papa John's International, Inc., came in at $72 on Friday, up $6.87 from the previous week's close. The only loser on the week was double-pizza brand company, Rave Restaurant Group, which lost 9 cents in value over the week to close Friday at 69 cents. 

Cheese

The downward trend in cheese prices reversed itself last week, when the average price paid for cheese blocks and barrels on the Chicago Mercantile Exchange grew slightly over the five days of trading. The U.S. Department of Agriculture said the average price paid for barrels gained a cent in its weekly average price, which came in at $1.03, while blocks gained 2 cents to average that same $1.03 for the week. Barrels closed at $1.05 and 40-pound  blocks ended the week at $1.07, the U.S.D.A. said. 

Across the nation, though cheese production varies between plants and regions, milk remains widely accessible and lower-priced than usual for the second consecutive week, the department said. Likewise, some cheese producers have reported upticks week over week in food service demand. Nonetheless, the U.S.D.A. said that when compared to previous years, the differences are noteworthy. 

Retail orders are somewhat busy, as cheese market prices are so low customers are less hesitant to take on a little extra. As inventories grow, some cheese producers are looking to age/store cheese loads and wait for more profitable times for the commodity.

The U.S.D.A. still qualifies cheese market tones as bearish, with producers hoping for some corrections in price very soon as some states begin lifting social distancing restrictions, as a result of the pandemic.

Wheat

Cash bids for wheat were mostly higher last week, the U.S.D.A. reported, with an increase of 9 million bushels of wheat export sales reported for 2019-20. The pizza-making staple ranged in price from nearly a cent lower to 25 cents higher. 
Kansas City U.S. No. 1 hard red winter, ordinary protein rail bid was 14 ½ cents higher, from $5.65 1/2-$5.75 1/2 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 25 cents higher at $5.70 per bushel.  

Minneapolis and Duluth U.S. No. 1 dark northern spring, 14.0 to 14.5 percent protein rail, was 3/4 cent lower to 24 1/4 cents higher at $6.25 1/2 per bushel. Portland U.S. soft white wheat rail was 5 cents higher, from $6.12-$6.15 per bushel.

Auto fuel

For consumers, like most pizza brands in this delivery and carryout-based pandemic-ridden world, gas prices have and remain to be a source of light in the proverbial tunnel of a locked-down populace. Last week alone, the average price of a gallon of regular dropped another 4 cents a gallon to average $1.77 nationwide. 

Pump prices have consistently declined for nine weeks as Americans follow stay-at-home orders and crude prices remain low due to COVID-19, according to the American Automobile Association. New data from the Energy Information Administration revealed that demand increased slightly from 5.1 million barrels a day, to 5.3 million b/d. 

An increase in demand may contribute to the slowing of pump price decreases in areas that see an uptick in gas sales, but AAA said prices will still be well below where they were a year ago, when the average amount paid for a gallon of gas was approximately $1.05 higher than today. 

The biggest decline in gas prices last week nationally was in Idaho, where prices dropped 11 cents, on average. Other states with substantial price declines include Alaska and Arizona (-8 cents); Montana, Wisconsin, Nevada and Oregon (-7 cents) and finally, Washington, Michigan and Utah (-6 cents).

The average national price of a gallon of regular this morning was $1.77, down 28 cents from last month, while mid-grade ($2.15) and premium ($2.42) were down a similar amount. The fluctuation in the price of diesel has not been as steep over previous weeks, with the average paid this morning of $2.46, down 17 cents from a month ago. E85 clocked in at $1.61 a gallon today, down 22 cents from last month. 

Natural gas

Natural gas spot prices rose at most locations for the seven days of the latest report that ended on April 22. The Henry Hub spot price rose from $1.64 per million British thermal units (MMBtu) last to $1.87/MMBtu over that period, according to the U.S. Energy Information Administration. 

At the New York Mercantile Exchange (Nymex), the price of the May 2020 contract increased 34 cents, from $1.60/MMBtu to $1.94/MMBtu over that time span. The price of the 12-month strip averaging May 2020 through April 2021 futures contracts climbed 25 cents/MMBtu to $2.549/MMBtu.

The natural gas plant liquids (NGPL) composite price at Mont Belvieu, Texas, rose by 20 cents/MMBtu, averaging $3.02/MMBtu for the week ending April 22. The prices of natural gasoline, butane, and isobutane fell by 1%, 3% and 6%, respectively. The price of propane rose by 8%. The ethane price rose by 21% last week over production and access concerns.

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.