The price for manufacturing U.S. coins for circulation went up last year, except for the half dollar, the United States Mint disclosed this month in its 2021 Annual Report. And for a sixteenth straight year, the unit cost for both cents and nickels was above their face values.
The Mint struck nearly 15 billion coins for circulation during the fiscal year.
"Despite operating under continued restrictions due to COVID-19, the Mint shipped 14.7 billion circulating coins during FY 2021. This increased level of circulating coin production was necessary to meet increased coin orders from the Federal Reserve," the U.S. Mint’s annual report said
In FY 2021, the toll to make, administer and distribute the 1-cent coin climbed to 2.1 cents from 1.76 cents while the cost for the 5-cent coin increased to 8.52 cents from 7.42 cents. Higher prices for copper and zinc accounted for much of the increases.
"Compared to last year, FY 2021 average spot prices for nickel increased 28.1 percent to $17,503.10 per tonne, average copper prices also increased 48.2 percent to $8,676.77 per tonne, and average zinc prices increased 27.9 percent to $2,821.12 per tonne," the U.S. Mint noted.
Lincoln cents have a composition of 2.5% copper with the balance zinc. Five-cent coins are minted in 25% nickel with the balance copper. Dimes, quarters, and half dollars are each composed in 8.33% nickel with their balance copper.
Cost to Make Dimes, Quarters and Half Dollars
Unlike for cents and nickels, the U.S. Mint made money in striking dimes, quarters, and half dollars because the cost of manufacturing and distributing them was lower than their face values.
In FY2021, the unit cost for the quarter increased to 9.63 cents from 8.62 cents and the dime’s unit cost rose to 4.39 cents from 3.73 cents. The unit cost for the half dollar, meanwhile, decreased to 11.67 cents from 25 cents — supported by an increase in the number of half dollars made and shipped to Federal Reserve Banks.
The following two tables summarize U.S. Mint costs for the cent through half dollar in fiscal years 2020 and 2021.
FY 2021 Unit Cost to Produce and Distribute 1c, 5c, 10c, 25c, and 50c Coins
|Cost of Goods Sold ($)||0.0181||0.0744||0.0386||0.0843||0.0917|
|Sales, General & Administrative ($)||0.0026||0.0095||0.0047||0.0106||0.0167|
|Distribution to Reserve Banks ($)||0.0003||0.0013||0.0006||0.0014||0.0083|
|Total Unit Cost ($)||0.0210||0.0852||0.0439||0.0963||0.1167|
FY 2020 Unit Cost to Produce and Distribute 1c, 5c, 10c, 25c, and 50c Coins
|Cost of Goods Sold ($)||0.0151||0.0653||0.0326||0.0760||0.2500|
|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||0.2500|
In profit from seigniorage — the difference between the face value and cost of producing and distributing circulating coins, the dime in FY 2021 realized $172 million while the quarter brought $349.3 million. (The U.S. Mint transfers seigniorage to the Treasury General Fund to help finance national debt.) Relatively few half dollars were produced for circulation compared to other denominations, but the U.S. Mint still earned $4.6 million for them.
In contrast, the cent and nickel have lost money since 2006.
Unit Costs and Seigniorage for Cent and Nickel from 2005 to 2021
|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 2021 compared to the prior year saw both production increases and decreases among denominations. In summary, the Mint delivered a total of:
- 7.613 billion cents, down 6.8% from the previous year;
- 1.736 billion nickels, up 8.6% from the previous year;
- 3.066 billion dimes, up 9.5% from the previous year;
- 2.274 billion quarters, down 21.8% from the previous year; and
- 12 million half dollars compared to no shipments in the previous year.
The five denominations combined to 14.701 billion coins, registering a 5% decrease from the 15.479 billion coins delivered in FY 2020.
The Fed pays face value for each coin they receive and, as such, the U.S. Mint’s FY 2021 circulating revenue for coinage totaled $1,044 million, down 10.7% from $1,168.5 million in FY 2020.
2021 Coin Shipments, Costs and Seigniorage
(coins and dollars in millions)
|One-Cent||Five-Cent||Dime||Quarter||Half Dollar||Mutilated & Other||Total|
|Value of Shipments||$76.1||$86.8||$306.6||$568.5||$6||–||$1,044.0|
After subtracting the year’s cost to produce the coins, which totaled $662.8 million, the U.S. Mint’s circulating profit or seigniorage totaled $381.20 million, representing a drop of $168.7 million, or 30.7%, from $549.9 million in FY 2020.
The Federal Government operates on a fiscal year that begins on October 1 and ends on September 30.
I do not see the point in continuing to make 1-cent coins. They barely circulate, they spend 99.99% of their lifespan sitting in someone’s coin jar waiting to be dumped into a coinstar machine. Maybe instead of paying 2 cents for each new 1 cent coin manufactured, the treasury can just offer 2 cents for every 1-cent coin turned in to a coinstar machine for a set period of time – that should bring these coins out of the woodwork in droves, and the treasury will wind up with a huge supply and won’t need to ask the mint to… Read more »
I agree we should do away with the penny. The dollar bill also. I would prefer a dollar coin in its place. Wouldn’t it be nice to see circulating silver eagles? Slot machines would be more fun. How about we just turn the pennies in to any bank for the 2 cents. Coinstar could take part in this (get their 2 cents from the bank as well), but why should they be the one to run this program? Do you own stock in coinstar, or something? I have never used them. Don’t they charge a fee? You wouldn’t get a… Read more »
slot machines no longer use coins, it’s been all digital for 10+ years.
There are definitely still slot machines that use coins. If youre in Vegas you can look them up, its only a couple places but theyre not extinct like phone booths. And I’m not even going to address the other stuff. You realize $63 million dollars in coins are thrown in the trash(sometimes vacuumed up, or myself, I throw pennies away often times. Not always but sometimes. Or they will otherwise go extinct around the country (thrown in the ocean, dropped in the middle of the forest, buried under somebodys grass)…so no, getting a few million pennies from coin jars is… Read more »
Yes, no more pennies , no more nickels. We just need to convince congress and the zinc industry. It cost me more than a penny to buy a penny sized washer.
Unfortunately we can’t get rid of nickels because the quarter isn’t a multiple of dimes. It would really complicate making change.
When Canada eliminated their 1¢ pieces they looked at killing the nickel too, but concluded it would only be practical if they withdrew their quarters and issued 20¢ coins instead.
Darn that need to stay compatible with Spanish pieces of eight!
You are welcome to send me all the coins you dont want.
Time to follow Canada’s lead and discontinue the cent. The nickel’s composition should be changed to alter cost. Then again, the U.S. government isn’t particularly expert at cutting costs.
I don’t think the Govmint cares. Bring back Black Diamond! It’s all about bison and being buff…
I have to agree with the Kaiser on this one. The basic units of our currency are dollars and cents, regardless of what coins are issued. E.g. none of the countries that eliminated their low-value coins (Canada, Australia, NZ, etc.) renamed the higher denominations. As far as the names themselves my, uh, 2¢ is they’re pretty much non-issues. Heck, ‘nickel’ isn’t even an official name – remember it came from 19th-century slang for any of the new nickel coins like white cents, trimes, etc. Plus ‘dime’ is a holdover from Jefferson’s original six-unit monetary system that included amounts expressed in… Read more »
The last time the US Government performed a major cut-cutting effort for coins was when they removed the silver content. That was a disaster.
I like my coins to have a value that is about the same as the face value. With that being said, I am all for getting rid of the cent. For cash transactions the seller can always round down to the nearest nickel.
Keep the penny and nickel. I disagree with “rounding up or down”. The hope that it will equal out in the end is going to favor the “up” higher prices and fewer “down” lower prices. And it’s almost painless because a few pennies would not hurt too many people and their budgets. (except for Grandma Coinpurse seeking a shiny new nickel and four pennies in the express line when I’m in a hurry). But in the mega-data-banking-accounting business, (and within my wallet,) tracking the ups vs. downs in the counting function while considering the iffy decimal point of “plus-or-minus $0.0?”,… Read more »
Coins last for years. If a penny costs 2.1 cents no matter as will be in circulation and used many times. As with anything the last two years you can probably blame it on COVID for price increase.
I am not a fan of rounding up or down. Corporations, banks and U.S. Government calculate to tenths of 1 cent. So as long as accountants do that you can expect having 1 cent, 5 cent and dime in circulation.
Guess you forget those days Kaiser when young and/or in college and having to search your couch and car floor for change to purchase gas or a quick meal. In that case also, those coins matter. I save some pennies in a small container and when it gets full then start paying exact change at store making sure to use four pennies to get to 9. Plus many banks and grocery stores offer a coin counting machine. Although ones in grocery stores charge anywhere from 6%-10% for use 🙁 I have containers when I know they’re full get me anywhere… Read more »
That’s the Spirit!
There are folks who refuse to use credit cards and prefer cash. I use both. So bills and coins are vital for them.
Also, vending machine, laundry mats business models is cash and especially use of coins. Although pennies not a factor for those two businesses.
There are still tremendous amount of people under-banked in USA. COVID has forced many to use cards or some form of electronic payment lowering coin usage to sector specific Industries for the most part.
I am with you that some of those Industries going digital / electronic to help with maintenance. Suspect those sectors will either have a machine to take in currency and provide a cash card and/or accept credit debit cards.
There’s a population that will not get cards be it because of lack/bad credit, distrust of banking system, newly arrived aliens (legal or illegal) etc., etc.
We should just print dollar bills on toilet paper..
Good one, Sir!
I think it’s time for legislation so the US Mint to start minting in 2023 a “TWO CENT” penny using the exact same design as the current “ONE CENT” coin and make the two interchangeable for three years and stop production of any 2023 “ONE CENT” pennies.
Furthermore, offer banks etc. $150 for every $100 of pennies returned after the “TWO CENT” version is introduced. Yes, there will be a 50% profit on returned coins but it offsets the cost of making the existing coin. We can live in a world where the lowest price is $0.02.
For those that think the US mint is “losing” money because they are spending 2 cents to make a one cent coin or paying more than 5 cents to make a nickel is not seeing the bigger picture. They also make 100 dollar bills that cost them about 15 cents (and only 5 cents for a one dollar bill – less security features) and 11 cents to make a quarter so clearly the situation is profitable overall. Yeah if all they made are cents and nickels then yes – that would be unsustainable, but the other currencies more than make… Read more »
And distribution of currency is done by Treasury via Federal Reserve.
I agree with what you say about the penny and nickel Big T. All in all, the US Mint is not losing money as the others coins cover the losses of the penny and nickel.
Just got taken by the local car wash I like. With quarters I could get it rinsed, soap/scrubbed, rinsed, and waxed for maybe ~$8 or less (each on a timer). Went in this week and he converted everything to card use, no quarters, and it cost me $14 and I hurried (min charge too). Swipe card and press stop when done. I knew something was up when there was a very large line for the automatic car wash, and hardly anyone for the self service bays. Might have been my last trip. Must have cost him a fortune for the… Read more »
It may have been costing owner small fortune repairing the coin operated mechanisms forcing him to switch to electronic payment systems too?
You can’t say it is the water (recycled), so maybe cost of chemicals, and also the higher gas and electric costs, and the recoup of machine retrofit. $14 to wash your car is excessive. Full service around here is $22, and they vacuum the inside, and clean the windows. Owning a pinball machine shows the mechanisms to be relatively cheap, so maybe that might not be the reason, but x??? quarters and in moisture environment takes a toll. There are significant front-end costs to opening an efficient car wash to get the water right. In some cases the water is… Read more »
Car Wash, Yeah!
Excellent movie and soundtrack Kaiser 🙂
We’re all Kaisers now!
Ah, ha ha ha – sorry about that Rich. Oopses.
Labor costs have risen too FViia which may be more the culprit for price increase. Yes, chemicals, soaps, etc. have risen for the operation too in the inflationary times USA is in now. Yes, $22 is not a nice price for a car wash. I guess I am fortunate that I can’t have my Jeep Wrangler washed in a car wash because of the spare tire on back along with top brake light as part of the mount for that spare. Pinball machine probably not as complicated a mechanism than other coin operated machinery that’s exposed to the elements (outside).… Read more »
Royal Mint in UK latest Music Legends silver coin is The Who. Pinball Wizard highlighted.
Royal Mint currently has Queen, David Bowie, Elton John and The Who coin ranges and came out in that order. I have Queen and Bowie coins Kaiser.
Guess when Disney runs low on quarterly performance rolls out a new Marvel hero for some quick bucks? 😉
Sir Kaiser, you are really on a roll today (LOL)! That has to be the best explanation of inflation ever.
Sierra Hotel! Kaiser all the way!!
This has been an interesting and fun thread. I’m not able to cast forward a quadruple entendre, maybe just a bad rhyme this time. What’s all this talk and balk about the nickel and penny go-away. We’re the coin guys who squawk and hawk cents and that makes sense because they were found as bonus coins in sets, with hopes and bets that their value increases while the mint fleeces us with a free bonus if you are hooked on the mint’s phone-us or the predictable “no-way Jose” on the mint’s bad gateway any day for a nickel or penny,… Read more »
Uncle Sams Nephew for President!
Got nuthin’ on the hip hop hippotamus, his rhymes are bottomless. (Conchords) 😉
I am one who is completely against eliminating the penny and the nickel as they are apart of our American heritage and culture. When I was at the Denver Mint a few years ago the tour guide addressed this topic and he essentially said that although the penny and nickel don’t produce income, the mint is still earning millions of dollars because of all the other coins. The dime, quarter, half dollar, and dollar coins all make up the losses that the penny and nickel incur. I do see and understand the reasoning for getting rid of the coins, but… Read more »