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Pizza commodity prices tick up, amidst tornadoes, flooding

With reports of some 500 tornadoes ripping mostly across the nation's farmland-rich mid-section in May, prices on some pizza commodities, including wheat, are trending higher at the start of June. But there is some good news and believe it or not it comes from the gas pump.

June 3, 2019 by S.A. Whitehead — Food Editor, Net World Media Group

With a flurry of tornadoes and flooding ravaging farmland in the Midwest and cheese producers reportedly reining in their production schedules, pizza brands saw the price of all but one major operational commodity inch up last week. The only real break came from gas prices, which are starting off the summer down from last year, making all those pizza deliveries more profitable these days. 

Cheese

On the Chicago Mercantile Exchange, cheese prices were mixed last week, with barrels down about 4 cents on the week and blocks up the same amount. Friday's closing price for barrels was $1.54, compared to $1.58 a week earlier. Blocks closed at $1.72, up from $1.68 the previous week.  
The U.S.D.A. said that although milk is broadly available nationwide, cheese producers are reining in production schedules in order to manage stocks. Cheese demand reports have been mostly steady to positive, with Midwestern producers reporting that they saw some sales improvements in late May.

Foodservice cheese demand has slowed down as schools have either begun summer vacations or will do so soon in most areas of the country. The U.S.D.A. said overall cheese market tones are a little "wobbly," as barrels have slipped to create a widening Chicago Mercantile Exchange price gap.

Wheat

Compared to last week, cash bids for wheat were mostly higher. Weather is wreaking havoc with those who farm all varieties of crops, with more than 500 tornadoes nationwide in May, along with flooding in Missouri, Illinois and in the Mississippi River Basins, which the U.S.D.A. said it expects will affect farmland throughout this growing season.  

White Winter Wheat was steady while Hard Red, Soft Red Dark Northern Spring Wheat were 24 1/4 to 58 3/4 cents higher. Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 583/4 cents higher from $5.94-$6.04 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 44 cents higher, from $5.47-$5.52 per bushel.  Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 24 1/4 cents higher at $6.48 1/2 per bushel. Portland U.S. Soft White wheat rail was steady, from $5.75-$6.05 per bushel.

Vehicle fuel 

With domestic gas stocks at beefed-up levels after growth in the run-up to Memorial Day weekend, the American Automobile Association said pump prices may remain under the $3/gallon mark during the busy summer driving season. Indeed, since that official Monday kick-off to summer, the national average for unleaded regular gasoline has held steady at $2.82, though this morning a gallon of regular went for a penny lower at $2.81, AAA reported.

That's 9 cents lower than a month ago and 15 cents lower than this time last year. A similar, though less dramatically lower price held across mid-grade ($3.14) and premium ($3.39), which each came in at about 9 cents lower than the price we paid this time last year. 

Diesel is even more below last year's price, with the average price of a gallon this morning clocking in at $3.08, compared to the $3.21 we paid for that same gallon this time last year. Finally, E85 fuel averaged $2.41 this morning, 6 cents lower than last year's price, making it the least volatile fuel price-wise over the last year. 

Natural gas

Natural gas spot prices rose at most locations for the report week ending Wednesday, May 29, according to the U.S. Energy Information Administration. Henry Hub spot prices rose from $2.61 per million British thermal units (MMBtu) to $2.63/MMBtu over that period.

At the New York Mercantile Exchange, the June 2019 contract expired at $2.633/MMBtu, up 9 cents/MMBtu from seven days earlier. The July 2019 contract increased to $2.624/MMBtu, up 6 cents/MMBtu over the same period. The price of the 12-month strip, averaging July 2019 through June 2020 futures contracts climbed 3 cents/MMBtu to $2.716/MMBtu.

Net injections to working gas totaled 114 billion cubic feet (Bcf) for the week ending May 24. Working natural gas stocks are 1,867 Bcf, which is 9 % more than the year-ago level and 12 % lower than the five-year (2014-18) average for the period.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 26 cents/MMBtu, averaging $5.35/MMBtu for the week ending May 29. The price of propane, natural gasoline, butane, and isobutane fell by 8, 7, 2 and 1 percent, respectively. The price of ethane rose by 1 percent.
According to Baker Hughes, for the week ending Tuesday, May 21, the natural gas rig count increased by one to 186. The number of oil-directed rigs fell by five to 797. The total rig count decreased by four and it now stands at 983.

Pizza company stocks

With Papa Murphy's Pizza officially a private offering now, following MTY Food Group's May 22purchase, Pizza Marketplace continues to track the three main publicly traded pizza brands, which last week, trended up, aside from Domino's. Its stock price fell over the last trading week from $282.82 at the close on May 24 to $279.50

Pizza Hut parent company Yum Brands was up $1.35 over the four days to close Friday at $102.35, while Papa John's grew its stock value from $46.72  to $48.47, showing investor confidence remains strong in the reemerging Louisville-based chain. 
 

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.