The price of producing U.S. coins for circulation climbed again last year, the United States Mint disclosed in its 2018 Annual Report. And also again, for a thirteenth straight year in fact, the unit cost for both cents and nickels remained above their face values.
The toll to make, administer and distribute the 1-cent coin was 2.06 cents in FY 2018 compared to 1.82 cents a year earlier, and cost for the 5-cent coin rose to 7.53 cents from 6.60 cents. Higher metal prices accounted for the increases.
"Compared to last year, FY 2018 average spot prices for nickel increased 28.7% to $13,141.41 per tonne, average copper prices rose 15.6% to $6,683.11, and average zinc prices increased 13.2% to $3,073.86," the U.S. Mint noted.
Lincoln cents are composed from 2.5% copper with the balance zinc and 5-cent coins are made from 25% nickel with the balance copper.
Cost to Make Dimes and Quarters
The U.S. Mint turned a profit on dimes and quarters as their respective unit costs of 3.73 cents and 8.87 cents were lower than their face values.
The following two tables summarize U.S. Mint costs for the cent through quarter with the first table for FY 2018 and the second one for FY 2017.
FY 2018 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||0.0178||0.0659||0.0323||0.0778|
|Sales, General & Administrative ($)||0.0025||0.0085||0.0045||0.0099|
|Distribution to Reserve Banks ($)||0.0003||0.0009||0.0005||0.0010|
|Total Unit Cost ($)||0.0206||0.0753||0.0373||0.0887|
FY 2017 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||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|
In profit from seigniorage — the difference between the face value and cost of producing circulating coins, the dime realized $149.5 million while the quarter brought $305.6 million. The U.S. 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 2019
|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. FY 2018 saw production decreases in all denominations but the nickel. The bureau delivered a total of:
- 8.057 billion cents, down 4.4% from the previous year;
- 1.327 billion nickels, up 1.6% from the previous year;
- 2.381 billion dimes, down 1.2% from the previous year; and
- 1.895 billion quarters, down 1.6% from the previous year.
The four denominations combined to 13.660 billion coins, marking a 2.9% decrease from the 14.068 billion coins delivered in FY 2017. The Fed pays face value for each coin they receive and, as such, the U.S. Mint’s FY 2018 circulating revenue for the four coins totaled $858.9 million — a 1.5% reduction from $871.8 million in FY 2017.
2018 Coin Shipments, Costs and Seigniorage
(coins and $ in millions)
|One-Cent||Five-Cent||Dime||Quarter||Mutilated & Other||Total|
|Value of Shipments||$80.6||$66.4||$238.1||$473.8||–||$858.9|
After subtracting the year’s cost to produce all four coins, which totaled $541.1 million, the U.S. Mint’s circulating profit or seigniorage for them reached $317.8 million — an 18.8% decline from the previous year’s $391.5 million.
The Mint disclosed its overall FY 2018 seigniorage at $321.1 million. This figure includes seigniorage of $3.3 million for 8 million in half-dollars, though no Kennedy halves were distributed to Federal Reserve Banks. The half-dollar’s unit cost for the fiscal year was reported at 6.58 cents. The last U.S. Mint annual report to include half-dollar figures alongside other circulating denominations was the one for 2010.