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Commodities: Pizza brands make nice gains ... especially Papa John's

Despite the global news swirling around Papa John's brand and its controversial founder, John Schnatter, it was a pretty profitable week for pizza restaurateurs in the U.S., with all the brands monitored by this site showing gains last week.

July 16, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

Despite the global news swirling around Papa John's brand and its controversial founder, John Schnatter, it was a pretty profitable week for pizza restaurateurs in the U.S., with all the brands monitored by this site showing gains last week. And the biggest winner of all was Papa John's, after brand leadership there moved to cut ties with Schnatter. 

Cheese

Cheese production is steady nationwide, with some producers in the Northeast running at a full production schedule, according to the U.S.D.A. Export demand is slow, as countries such as Mexico look to European markets to avoid increasing U.S. import tariffs. Trade issues impacted the West the most compared to any other region, causing cheese makers to switch production from barrel to block to hedge against the loss of some international market shares. 

Domestic cheese demand is steady. The demand for Italian cheeses is steady to decreasing this time of year. Western sellers report concerns about finding new outlets to prevent further increasing inventories. Cheese inventories nationwide are steady to increasing, with the closing price reported by the U.S.D.A. for barrels at $1.4225, compared to the previous Friday's closing price of $1.2450. The closing price for blocks is $1.5600, compared to $1.5425 the previous week. 

Wheat

Compared to last week, cash bids for wheat were mixed, according to the U.S.D.A. On Tuesday, the U.S. proposed another $200 billion worth of tarrifs against China, setting a bearish tone early in the week. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid, was 22 cents lower from $5.58 1/4-$5.73 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 21 to 24 cents lower, from $4.91-$5.09 per bushel. Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 17 to 22 cents lower, from $6.65 1/2-$6.70 1/2 per bushel. Portland U.S. Soft White wheat rail was 5 to 18 cents higher, from $5.85-$6.08 per bushel.

Vehicle fuel

Gasoline prices are still down from last month a few cents, but they are edging back up again from prices last week, with today's going price for regular at $2.88, up a cent from last week, but still down two cents from the previous month. That trend held true across all grades of gas, as well as for diesel ($3.17 this morning) and  E-85 ($2.43). However, all of today's prices were all more than 30 cents a gallon above last year's rates. 

Natural gas

Natural gas spot price movements followed temperatures at most locations for the report week ending last Wednesday. The Henry Hub spot price fell from $2.87 per million British thermal units (MMBtu) to $2.84/MMBtu over that period, with the average price for the week falling 6 cents, from $2.91/MMBtu to $2.85/MMBtu.

At the New York Mercantile Exchange (Nymex), the August 2018 contact price decreased to $2.82/MMBtu, down 1 cent from the previous Thursday, since July 4 was a market holiday. Net injections into working gas totaled 51 billion cubic feet (Bcf) for the week ending July 6. Working natural gas stocks are 2,203 Bcf, which is 25 percent lower than the year-ago level and 19 percent lower than the five-year (2013-17) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 30 cents, averaging $9.15/MMBtu for the week ending July 11. The price of isobutane fell by 5 percent. The prices of ethane, propane and butane rose by 8, 5, and 7 percent, respectively. The price of natural gasoline remained flat week over week.

According to Baker Hughes, for the week ending Tuesday, July 3, the natural gas rig count remained flat at 187. The number of oil-directed rigs rose by five to 863. The total rig count increased by five, and it now stands at 1,052.

Pizza company stocks

Pizza brands — and yes, even Papa John's — did well last week in trading, with all of the brands monitored by Pizza Marketplace showing gains over the week's trading activity. Domino's was back in the "plus" category after a couple of weeks of sliding values, closing Friday at 281.40, up from $279.15, the previous week's close. 

Pizza Hut parent, Yum brands, also had a nice week, closing up 87 cents on the week for Friday's ending value of $79.14. And as we reported in other coverage on this site, stock values for the embattled Papa John's brand soared last week on news that its founder was being stripped of his roles with the company as its spokesman and board chair, followed by other actions Sunday night. Papa John's closed Friday up $2.28 to $53.55, signaling investors are behind leadership in their actions. 

Finally, Papa Murphy's also gain 5 cents on the week, to close at $5.15 Friday. 

Photo: iStock

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.