It’s costing more to make U.S. coins for circulation. Unit costs climbed for every denomination, the United States Mint disclosed in its 2017 Annual Report, and the cost of making cents and nickels remained above their face values for a twelfth year in a row.
The toll to produce, administer and distribute the 1-cent coin was 1.82 cents in FY 2017 compared to 1.50 cents a year earlier. For the 5-cent coin, the cost went up to 6.60 cents from 6.32 cents. Higher metal prices were one factor in the increases.
"Compared to last year, FY 2017 average spot prices for nickel increased 10.3 percent to $10,214.20 per tonne, average copper prices rose 21.3 percent to $5,782.69, and average zinc prices increased 45.4 percent to $2,715.62," the U.S. Mint’s annual report noted.
Lincoln cents are composed from 2.5% copper with the balance zinc and 5-cent coins are made from 25% nickel with the balance copper.
Cost to Make Dimes and Quarters
As has been the case for several years now, the U.S. Mint made money only on dimes and quarters since their respective unit costs at 3.33 cents and 8.24 cents are lower than their face values.
The following two tables summarize U.S. Mint costs for the cent through quarter with the first table for FY 2017 and the second one for FY 2016.
FY 2017 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||0.0156||0.0564||0.0284||0.0711|
|Sales, General & Administrative ($)||0.0024||0.0088||0.0045||0.0103|
|Distribution to Reserve Banks ($)||0.0002||0.0008||0.0004||0.0010|
|Total Unit Cost ($)||0.0182||0.0660||0.0333||0.0824|
FY 2016 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||0.0131||0.0551||0.0269||0.0672|
|Sales, General & Administrative ($)||0.0017||0.0071||0.0034||0.0080|
|Distribution to Reserve Banks ($)||0.0002||0.0010||0.0005||0.0011|
|Total Unit Cost ($)||0.0150||0.0632||0.0308||0.0763|
In profit from seigniorage — the difference between the face value and cost of producing circulating coins, the dime realized $160.5 million while the quarter brought $322.7 million. The Mint transfers seigniorage to the Treasury General Fund to help finance national debt.
In contrast, the two smallest U.S. coins have lost money since 2006.
Unit Costs and Seigniorage for Cent and Nickel from 2005 to 2017
|Fiscal Year||Lincoln Cent Unit Cost||Jefferson Nickel Unit Cost||Combined 1c and 5c Seigniorage (in millions)|
The U.S. Mint produces and issues circulating coins to Federal Reserve Banks in quantities to support their service to commercial banks and other financial institutions. The fiscal year saw production decreases in all denominations. The bureau delivered a total of:
- 8.426 billion cents, down 7.6% from the previous year;
- 1.306 billion nickels, down 17.2% from the previous year;
- 2.410 billion dimes, down 23.1% from the previous year; and
- 1.926 billion quarters, down 22.4% from the previous year.
The four denominations combined to 14.068 billion coins, marking a 13.7% decrease from the 16.308 billion coins delivered in FY 2016. The Fed pays face value for each coin they receive, with the Mint realizing FY 2017 circulating revenue of $871.8 million — down 21% from $1,104.2 million in FY 2016.
2017 Coin Shipments, Costs and Seigniorage
(coins and $ in millions)
|One-Cent||Five-Cent||Dime||Quarter||Mutilated & Other||Total|
|Value of Shipments||$84.3||$65.3||$240.8||$481.4||–||$871.8|
After subtracting the year’s cost to produce all four coins, which totaled $480.3 million, the U.S. Mint’s circulating profit or seigniorage reached $391.5 million for a 32.4% drop from the previous year’s $578.7 million. The resulting seigniorage per dollar issued reached $0.45, down from the prior year’s $0.52.