Food & Beverage

Pizza traders end January on a sour note

Maybe it was the Nor'easter and all that snow heading into a great swath of the U.S., but pizza investors were not in the mood to put many of their pennies into pizza brands stocks last week.

Pizza investors were in a grumpy mood last week. (iStock)

February 1, 2021 by S.A. Whitehead — Food Editor, Net World Media Group

Pizza restaurant companies investors ended the first month of the new year in a mostly sour mood, sending most of the brands Pizza Marketplace watches weekly down in value. For pizza operators, that trend was aggravated last week with more pressure on their bottom line due to a continuation of rising gas prices and a significant spike in wheat prices last week.

The sole investment winner last week in the publicly traded pizza realm, was Louisville, Kentucky-based Papa John's International Inc., which chalked up a gain of $3.46 on the week to close Friday at $102.28.

For that brand's competitors, the week was not a profitable one with investors, beginning with Ann Arbor, Michigan-based, Domino's Pizza Inc., which saw its stock value fall from $380.37 to $370.76 over the week's trading activity. Meanwhile, Pizza Hut parent, Yum Brands also took a spill in value, dropping from $107.09 the previous Friday to $101.49 on Jan. 29 at the close of trading.

Finally, at the Dallas-area headquarters of Pizza Inn and Pie Five parent, Rave Restaurant Group, they also closed the books on January in something short of a celebratory mood after that stock fell 7 cents on the week to close Friday at $1.04.

Cheese

In the "Win" column for pizza operators last week, was the news that cheese prices took a dip in value for both barrels and blocks. Barrels averaged $1.40, which is down 5 cents on the week, while blocks were a penny lower at $1.59. Barrels closed at $1.39 on Friday, while 40-pound blocks ended up at just under $1.58.

Cheese production continues apace nationwide, according to the U.S. Department of Agriculture, which also said that the December National Agricultural Statistics Service Cold Storage report noted overall increases in cheese holdings throughout the country.

Currently, the USDA said there are myriad questions regarding the near-term market tones of commodity cheese including those around areas like the expectations of need for food box programs and those concerning limitations on restaurants and how that effects cheese purchase.

Wheat

Wheat sales grew 15%, adding more than a nickel to the price of a bushel, which now stands at just over $6.52. In Kansas City, futures grew more than 3 cents to slightly over $6.29 per bushel, the U.S.D.A. said.

Wheat prices grew over last week, with most contracts rising more than 2% over the week. March Minneapolis Grain Exchange spring wheat futures spiked more than 14% to $6.34, while March Chicago soft red winter wheat futures were $6.63, up more than 15 cents.

Auto fuel

Gas prices are continuing to climb, despite lessening U.S. demand. Last week the average for a gallon of unleaded regular grew 8 cents over the previous week to $2.42, although gas demand declined from 8.11 million barrels per day (b/d) to 7.83 million b/d, according to the U.S. Energy Information Administration.

The states with the highest increases last week included Michigan ( up12 cents), as well as Indiana, North Carolina and Ohio (all up 7 cents), and finally Illinois ( up 5 cents).

Aside from that $2.42 average price for a gallon of regular nationally, mid-grade was also almost 3 cents higher on the week at $2.75, while premium increased 2 cents to $3.02. At an average of $2.65 this morning, diesel was up a penny over last week's price and at $2.13, E85 was up 3 cents.

Natural gas

For the last seven-day period that the U.S. Energy Information Administration has recorded data that ended on Jan. 27, natural gas spot prices rose. The Henry Hub spot price rose from $2.42 per million British thermal units (MMBtu) last Wednesday to $2.71/MMBtu yesterday.

At the New York Mercantile Exchange, the February 2021 contract expired yesterday at $2.70 per million British thermal units (MMBtu), up 16 cents/MMBtu over the seven days. The March 2021 contract price increased to $2.72/MMBtu, up 19 cents/MMBtu. The price of the 12-month strip averaging March 2021 through February 2022 futures contracts climbed 14 cents/MMBtu to $2.915/MMBtu.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 25 cents/MMBtu, averaging $7.10/MMBtu for the week. The prices of propane, butane, and isobutane fell by 6%, 5%, and 4%, respectively. The price of natural gasoline rose by 1%. The price of ethane remained flat week over week.

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.