The cost for manufacturing U.S. coins for circulation decreased last year, excluding the dime which remained unchanged, the United States Mint disclosed in its 2020 Annual Report. Notably, however, the unit cost for both cents and nickels was above their face values for a fifteenth year in a row.
In FY 2020, the toll to make, administer and distribute the 1-cent coin retreated to 1.76 cents from 1.99 cents while the cost for the 5-cent coin eased to 7.42 cents from 7.62 cents.
Lower prices for copper and zinc helped in keeping costs down, although nickel prices did increase.
"Compared to last year, FY 2020 average spot prices for nickel increased 5.6 percent to $13,666.51 per tonne, whereas average copper prices decreased 3.6 percent to $5,856.52 per tonne, and average zinc prices decreased 15.4 percent to $2,206.15 per tonne," the U.S. Mint noted.
Lincoln cents have a composition of 2.5% copper with the balance zinc. Five-cent coins are minted in 25% nickel with the balance copper. Dimes and quarters are each composed in 8.33% nickel with their balance copper.
Cost to Make Dimes and Quarters
Unlike for cents and nickels, the U.S. Mint turned a profit with dimes and quarters because the cost of making them was lower than their face values. In FY2020, the unit cost for the quarter decreased to 8.62 cents from 9.01 cents while the dime’s unit cost was unchanged at 3.73 cents.
The following two tables summarize U.S. Mint costs for the cent through quarter in fiscal years 2019 and 2020.
FY 2020 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||0.0151||0.0653||0.0326||0.0760|
|Sales, General & Administrative ($)||0.0022||0.0080||0.0042||0.0091|
|Distribution to Reserve Banks ($)||0.0003||0.0009||0.0005||0.0011|
|Total Unit Cost ($)||0.0176||0.0742||0.0373||0.0862|
FY 2019 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
|Cost of Goods Sold ($)||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|
In profit from seigniorage — the difference between the face value and cost of producing circulating coins, the dime in FY 2020 realized $175.6 million while the quarter brought $476.3 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 2020
|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 2020 saw production increases in all denominations compared to the prior year. The Mint delivered a total of:
- 8.174 billion cents, up 11.7% from the previous year;
- 1.598 billion nickels, up 38.6% from the previous year;
- 2.801 billion dimes, up 26.5% from the previous year; and
- 2.906 billion quarters, up 63.0% from the previous year.
The four denominations combined to 15.479 billion coins, registering a 24.2% increase from the 12.466 billion coins delivered in FY 2019. The Fed pays face value for each coin they receive and, as such, the U.S. Mint’s FY 2020 circulating revenue for coinage totaled $1,168.5 million, up 46.4% from $798.1 million in FY 2019.
2020 Coin Shipments, Costs and Seigniorage
(coins and dollars in millions)
|One-Cent||Five-Cent||Dime||Quarter||Mutilated & Other||Total|
|Value of Shipments||$81.8||$79.9||$280.1||$726.5||–||$1,168.5|
After subtracting the year’s cost to produce the coins, which totaled $618.6 million, the U.S. Mint’s circulating profit or seigniorage totaled $549.9 million, representing an increase of $231.6 million, or 72.8%, from $318.3 million in FY 2019.