The price of producing U.S. coins for circulation climbed again last year, the United States Mint disclosed in its 2019 Annual Report. And for a fourteenth straight year, the unit cost for both cents and nickels was above their face values.
In FY 2019, the toll to make, administer and distribute the 1-cent coin eased to 1.99 cents from 2.06 cents while the cost for the 5-cent coin rose to 7.62 cents from 7.53 cents. Lower metal prices helped in keeping costs better in check.
"Compared to last year, FY 2019 average spot prices for nickel decreased 1.6 percent to $12,937.41 per tonne, average copper prices decreased 9.1 percent to $6,072.91 per tonne, and average zinc prices decreased 15.2 percent to $2,607.23 per tonne," the U.S. Mint noted.
Lincoln cents are composed from 2.5% copper with the balance zinc and 5-cent coins are made from 25% nickel with the balance copper.
Cost to Make Dimes and Quarters
The U.S. Mint turned a profit in making dimes and quarters as their respective unit costs of 3.73 cents and 9.01 cents were lower than their face values.
The following two tables summarize U.S. Mint costs for the cent through quarter with the first table for FY 2019 and the second one for FY 2018.
FY 2019 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||0.0168||0.0659||0.0317||0.0777|
|Sales, General & Administrative ($)||0.0029||0.0095||0.0051||0.0114|
|Distribution to Reserve Banks ($)||0.0002||0.0008||0.0005||0.0010|
|Total Unit Cost ($)||0.0199||0.0762||0.0373||0.0901|
FY 2018 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||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|
In profit from seigniorage — the difference between the face value and cost of producing circulating coins, the dime in FY 2019 realized $138.8 million while the quarter brought $285.2 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 2019 saw production decreases in all denominations compared to the prior year. The Mint delivered a total of:
- 7.315 billion cents, down 9.2% from the previous year;
- 1.153 billion nickels, down 13.1% from the previous year;
- 2.215 billion dimes, down 7% from the previous year; and
- 1.783 billion quarters, down 5.9% from the previous year.
The four denominations combined to 12.466 billion coins, marking an 8.8% reduction from the 13.668 billion coins delivered in FY 2018. The Fed pays face value for each coin they receive and, as such, the U.S. Mint’s FY 2019 circulating revenue for coinage totaled $798.1 million, down 7.5% from $862.7 million in FY 2018.
2019 Coin Shipments, Costs and Seigniorage
(coins and $ in millions)
|One-Cent||Five-Cent||Dime||Quarter||Mutilated & Other||Total|
|Value of Shipments||$73.2||$57.6||$221.5||$445.8||–||$798.1|
After subtracting the year’s cost to produce the coins, which totaled $479.8 million, the U.S. Mint’s circulating profit or seigniorage reached $318.3 million — 0.9% lower than FY 2018 due to reduction in coin production levels.