The cost of manufacturing U.S. coins for circulation increased across all denominations, the United States Mint disclosed in its 2022 Annual Report, and for the seventh straight year, the unit cost for both pennies and nickels was above their face values.
The Mint struck over 12 billion coins for circulation during the fiscal year, down sharply from the prior one.
"FY 2022 circulating coin shipments to the Federal Reserve Bank decreased by 2.6 billion units (17.6 percent) to a total 12.1 billion coins compared to last year. The year saw decreases in shipments of all denominations, except the quarter dollar, which resulted in decreased revenue and seigniorage compared to last year," the U.S. Mint’s annual report said.
In FY 2022, the toll to make, administer and distribute the 1-cent coin jumped to 2.72 cents from 2.1 cents (29.5%) and the unit cost for the 5-cent coin increased to 10.41 cents from 8.52 cents (22.2%). Fewer shipments and higher prices for nickel, copper and zinc accounted for most of the hikes.
Compared to the prior year, "FY 2022 average spot prices for nickel increased 41.4 percent to $24,746.95 per tonne, average copper prices also increased 6.3 percent to $9,223.97 per tonne, and average zinc prices increased 26.5 percent to $3,568.26 per tonne," the U.S. Mint noted.
Lincoln cents have a composition of 2.5% copper with the balance zinc. Five-cent coins are minted in 25% nickel with the balance copper. Dimes, quarters, and half dollars are each composed in 8.33% nickel with their balance copper.
Cost to Make Dimes, Quarters and Half Dollars
Unlike for cents and nickels, the U.S. Mint made money in minting dimes, quarters, and half dollars because the cost of manufacturing and distributing them was lower than their face values. In FY2022, unit costs increased:
- for the dime to 5.03 cents from 4.39 cents (14.6%),
- for the quarter to 11.11 cents from 9.63 cents (15.4%), and
- for the half dollar to 17.15 cents from 11.67 cents (47%).
The following two tables summarize U.S. Mint costs for the cent through half dollar in fiscal years 2021 and 2022.
FY 2022 Unit Cost to Produce and Distribute 1c, 5c, 10c, 25c, and 50c Coins
|Cost of Goods Sold ($)||0.0243||0.0917||0.0442||0.0975||0.1286|
|Sales, General & Administrative ($)||0.0026||0.0109||0.0054||0.0120||0.0286|
|Distribution to Reserve Banks ($)||0.0003||0.0015||0.0007||0.0016||0.0143|
|Total Unit Cost ($)||0.0272||0.1041||0.0503||0.1111||0.1715|
FY 2021 Unit Cost to Produce and Distribute 1c, 5c, 10c, 25c, and 50c Coins
|Cost of Goods Sold ($)||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|
In profit from seigniorage — the difference between the face value and cost of producing and distributing circulating coins, the dime in FY 2022 realized $141.6 million while the quarter brought $337.1 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. The U.S. Mint earned $2.3 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 20212
|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 2022 compared to the prior year saw production reductions across all but one denomination — the quarter. During the year, the U.S. Mint shipped a total of:
- 5.387 billion cents, down 29.2% from the previous year;
- 1.442 billion nickels, down 16.9% from the previous year;
- 2.849 billion dimes, down 7.1% from the previous year;
- 2.426 billion quarters, up 6.7% from the previous year; and
- 7 million half dollars, down 41.7% from the previous year.
The five denominations combine to 12.111 billion coins, registering a 17.6% decrease from the 14.701 billion coins delivered in FY 2021.
The Federal Reserve pays face value for each coin they receive and, as such, the U.S. Mint’s FY 2022 circulating revenue for coinage totaled $1,020.7 million, down 2.2% from $1,044 million in FY 2021.
2022 Coin Shipments, Costs and Seigniorage
(coins and dollars in millions)
|One-Cent||Five-Cent||Dime||Quarter||Half Dollar||Mutilated & Other||Total|
|Value of Shipments||$53.9||$72.1||$284.9||$606.3||$3.5||–||$1,020.7|
After subtracting the year’s cost to produce the coins, which totaled $710.5 million, the U.S. Mint’s circulating profit or seigniorage totaled $310.2 million, representing a decrease of $71 million, or 18.6%, from $381.2 million in FY 2021.
The Federal Government operates on a fiscal year that begins on October 1 and ends on September 30.
It’s not too hard to figure out that as long as the Mint’s costs to manufacture circulating coinage for the Federal Reserve continue rising then so will the prices for the Mint’s numismatic products to help it make up for that growing profit slippage. However, if the day ever arrives that the Mint’s annual expenses actually exceed its total income then the Mint will be forced to either entirely rethink its production output or worst case scenario be legally required to shut down.
I can see the day when there will be no coin or paper, only cell phones. On another note, Canada discontinued their cents in 2012 and converted their nickel coins to nickel plated steel. In the coming years, we’ll see what the Mint finally decides to do to address this growing shortfall.
It’s not the Mint’s decision. Talk to Congress.
Major D and Antonio,
Both Congress and the Mint are facing an ever shortening grace period as the Mint’s annual expenses cut ever more into its seigniorage. Since the Mint is legally bound to not have an operating shortfall, at some point any and all personal inclinations will necessarily be outweighed by constitutional mandate.
It’s totally unrelated.
When revenue from one source declines as compared to expenses, why wouldn’t the seller look to make up for that shortage via another revenue stream?
Kaiser, that’s not how the programs are set up.
Perhaps not on a relative basis item to item across the board, but when taken separately, i.e. individually is there a reason the bullion prices charged to Authorized Purchasers couldn’t be raised substantially?
Obviously the suppliers and authorized purchasers are running the mint. Great scam going, buy Silver Eagles at 50 cents over spot and sell for $10 over spot. The mint should allow anyone to buy a monster box directly for $100 over what authorized purchasers pay.
Unless of course, Andy, you happen to be Caffeine Mike “Sold Out Limited Edition” Mezack, in which case you get a third party to slap a questionable 70 grade on hordes of these cheap bullion ASEs and proceed to hawk them to the unsuspecting for $80+ each.
The same people thar expect their change to the penny will pay $199 for a NGC proof 70 ASE the mint sells for $80 and contains $22 in silver.
Good call there, Andy. It is amazing how people can be so fastidiously frugal on the one hand and such foolish spendthrifts on the other. Makes very little sense to me.
again I ask can we not stop the cent-making and just devote that production to quarters? we can reduce the coin shortage pretty much right away, plus make additional seignorage at the same time (reduces deficit! yay). the mint can of course make cents for collector sets (rare key date only 1m made each year!) and heck why not make them out of the original formula bronze instead of copper-coated zinc.
In case some data or additional information is desired on the topic. This is my $.12 1/2 cents donation, towards the effort! In case you haven’t seen here is a link to the GAO and a published piece, titled: “U.S. Currency: Financial Benefit of Switching to a $1 Coin Is Unlikely, but Changing Coin Metal Content Could Result in Cost Savings” link below. “Fast Facts: “The United States spent $1.3 billion to manufacture money in 2017. Is it possible to save money on manufacturing by changing the money itself? In the past, Congress has discussed replacing $1 bills with coins… Read more »
Caliskier, your points make perfect sense. I wish Congress will get something done (but unfortunately, likely not in my lifetime…)
Congress would only get something done if its members responded to their constituents and the American taxpayer as readily as they do to their campaign chest contributors, but that is as likely as a two-headed unicorn.
Sorry to burst your bubble Kaiser Wilhelm! Have you heard of Bioengineering, Genetic Splicing, Robotics, Nano Technology? A two-headed Unicorn isn’t as unlikely, as perhaps, what you’ve implied?
You’re going to have to come up with something a bit more outlandish? LOL BTW A 2 headed coin has already been done, nice try! As you can see below, someone took your idea and “flew” vs ran with it! Haha
PS You are 100% correct in the above. Ugggh….
Ahoy, Caliskier, have I not consumed science fiction avidly and voluminously for a lifetime and am I not therefore fully educated and well versed regarding virtually all possible future technology? Oh, wait…does the far out imaginary stuff count?
Here we go again the government wasting are money who does that make pennies the cost more then 2 cents . What they don’t understand that that’s not helping use let’s use there money to make penny then then they would have a problem . And this money we have given Ukrainian why can’t we just give them 10,000 more then any other country and call it quits . Why don’t they get ride of free grants we don’t need them it will be a great day when we switch to crypto’s . The government needs to be accountable for… Read more »
I have long endorsed the capital idea of making the members of Congress have to live their everyday lives constrained by the very same limit on their monetary resources as are faced by the hard-working and financially struggling average American. I can only imagine what an exceptional wake-up call that would be for all those Little Lord Fauntleroys on the Hill!
Caliskier, this is a perfect example of the absolute refusal of the members of Congress to think outside their “who’s funding my next re-election” box. After all, there couldn’t be a cent shortage if cents didn’t exist as coinage anymore!
How about, who’s padding my bank account, providing(wink, wink) “Cliff Notes”, and “Stock Advice for Dummies” (an insiders dream) to “enrich” the knowledgeable “Public Servant”? A lot gets discussed, contemplated, analyzed, assessed, factored, estimated, budgeted, then suggestions are made, more time and money is needed to verify, then zip, nada, new topic, more fires, we need to gather, tax and spend more money….. I digress…. Look; over there, it’s the “Goodrich” blimp!”LOL Did you know: “Although Goodyear’s blimp flew first, Goodrich’s blimp was the first to win approval from the government.” A little blimp info(oxymoron haha) history/information/ if interested.(Goodyear, Goodrich,… Read more »
Now you’ve gone and done it, Caliskier. I’m sure I just spotted a whole squadron of F-22s armed to the gills with $500,000 missiles who appear to be headed straight for the nearest football stadium.
By the way, B.F. Goodrich wasn’t going away quietly…
It doesn’t make sense, c_q, for the Mint to keep cranking out cents that just disappear.
The penny should be discontinued immediately. The 2.72 cent cost is at the manufacturers warehouse. Let’s say a tube of toothpaste that sells for $1 costs the manufacturer $2.72 to get to it’s warehouse next to the factory. Then add transportation to the retailer’s distribution center, and then transportation to the store, stocking, storage and handling at the store, general store overhead and we’re talking at least $5.00 for that tube of toothpaste. The overhead at a bank, with all the security, vaults and careful counting required is even more than at a typical retailer. Congress could end this nonsense,… Read more »
I’m in agreement about ending the production of the Lincoln cent. However, the 4 cent bump you propose is akin to printing more money to get out of debt. I don’t think so. As far as Congress ending it? They’re responsible for keeping it going.
The penny should be discontinued immediately.
I’m in agreement about ending the production of the Lincoln cent.
again I ask can we not stop the cent-making…?
If only the pertinent authorities would pay heed to these illustrious gentlemen!
The 1 and 5 mil coins that were used to round off sales tax in the 1930s and quickly fell into disuse are the equivalent of 2 and 10 cents today. In the 1940s 7 pennies would get you a ride on a Streetcar in Chicago. 7 quarters won’t get you a CTA ride today. Most people won’t bother digging through their couches and drawers for 5 cents, most of them are already full of dimes and quarters. There won’t be an inflation effect of revaluing the penny, wasting billions of dollars a year making and handling pennies will contribute… Read more »
Sorry Andy, I call it wishful thinking about retroactively revaluing the Lincoln 1 cent to 5 cents.
I’m with you there, Major D, as I don’t think there is such a thing as retroactive revaluation. Alternatively, since history has shown that prices are headed in one direction only and as that happens to be up, having the dime as the lowest denomination of circulating coin going forward shouldn’t be all that much of an inconvenience.
The 10 cent is the smallest denomination in New Zealand, but they use 10, 20 and 50 cents ans one and two dollar coins. Unless the US wants to replace the quarter with 20 and 50 cent pieces in a complete recoinage like New Zealand did, a 5 cent coin would be needed. The other alternative would be a nickel plated steel(or zinc) 5 cent like Canada. Tens of billions would need to be produced quickly, as today’s nickels would probably dissappear from circulation. The longer Congress waits to update the coinage, the more difficult the solutions will be to… Read more »
The New Zealand model appears to be quite reasonable, eminently workable and as such correspondingly attractive, Andy; thanks for putting it out there as a possible solution.
Andy and Kaiser, I have no doubt that we’d be much better off if you were calling the shots on the circulating coinage. Unfortunately, Congress is beholden to $$$ special interests that like the status quo- so I’m not optimistic that there will be any positive changes happening in my lifetime.
I can’t dispute anything you just laid out, Major D. The intensive policy stranglehold a whole variety of special interests (via their extensive lobbying services) have been able to maintain consistently on both Houses of Congress dates back to the late 19th Century. Since this process of bypassing the wishes of both the constituency and the taxpayer base has not been interrupted in well over a hundred years, for anyone to have some sort of expectation that anything of substance will change abruptly in that regard is more than just a tad unrealistic.
Andy, you say: “Tens of billions would need to be produced quickly, as today’s nickels would probably dissappear from circulation. The longer Congress waits to update the coinage, the more difficult the solutions will be to implement.” There in lies a big part of the equation! In the past week, I’ve spent hours and hours reading about this continuing “FUBAR” situation. Absolutely crazy insane! Literally both sides years apart, saying opposite or dismissing plans due to assumptions and dropping it until a few years later, then new people, opposite of what was said or discussed, then repeat! We are beyond… Read more »
Worth the read and can start to give you a taste of some of what I’ve found regarding, $1’s and sense! This is one I’m referring to, where an official stance or lack of one has stopped any progress or not made it feasible and they then wonder “Why”? Disgusted, infuriating, total BS! A Senator as well as US Mint Director we’re not in favor of eliminating the paper $1! WTF Then the whole distribution, accessibility, numbers needed, stacking up in vaults, etc. Eye opening, in the context of other articles, publication; meetings; studies, US Mint, Congress, Treasury; GAO as… Read more »
And here I was assured that selfie would never see the light of day!
In 1965 the mint should have learned that producing a years worth of silver 1964 dated coins every week and shipping them to banks would not stop the hoarding. About the time the Treasury Department exhausted it’s silver reserve they figured ot the only way to stop hoarding was switching to 90% copper clad. Hence the mid 60s coin shortage. Today’s dime is worth what a penny was in 1965, so the mint could just quit producing pennies and nickels and let them dissappear and let cashiers figure out how to make change using only dimes and quarters.
Andy, no insult to cashiers intended but if some of them have difficulty making correct change now with all the various coin denominations still available what would happen if they were in fact limited to just dimes and quarters. Wouldn’t it serve everyone’s interests a lot better to institute rounding, although, as I think about it now, that would possibly cause its own kind of consternation due to what would be almost inevitable rounding errors. You just can’t win.
That’s called inflation 😮 🙁
Inflation and devaluation are joined together like Siamese twins.
Yes, if your money isn’t working for you it’s working against you. That’s why all those Uncirculated/Mint sets from the 70s and 80s are such big losers. Take the 1980 Mint set for example: original list price was $9, which equals $32.68 in today’s dollars. APMEX sells the set today for $8.99. So, if you bought a set in 1980 thinking it would accrue in value- you actually lost $23.69 for it sitting in your closet. Many, many other examples in the US Mint’s offerings over the years- majority are value losers.
Another example is all those pre-1982 copper cents people are keeping in jars (thinking they’re gaining value because of the future metal melt potential). The reality is that a 1981 copper cent put in a jar back in 1981 has lost 3 cents in value as today’s inflation equivalent is 4 cents. Meanwhile today’s melt value is 2.6 cents per Coinflation (so you lost 1.4 cents, assuming you could melt it with zero energy cost)
Another one in the thumbs up column. You’re on a roll, Major D!
Very astute reasoning, Major D. Kudos on that.
From having been in that sort of business for twenty-three years, I can tell you that in addition to all the other costs you cited as contributing to a product’s retail price you have to allow another 50% on average for the combined wholesaler and retailer profit margins, so by applying the total from your previous calculations to that the actual retail price would therefore be closer to $7.50 rather than merely $5.00.
It’s called Central Banking Digital Currency, or CBDC. Look for it soon from lovely Uncle Joe. The govt will know everything about your finances and have the ability to control how and if you spend your money. No more cost for minting coins
If you do mobile/electronic banking or purchases, the banks and apps already know everything about your finances and habits and have shared it with a boatload of partners. You seriously think the Gov is the frontrunner on technology and tracking? It’s more likely big corporations e.g., Microsoft, Apple, Amazon, PayPal and Goggle
Thank you, Major D, for contributing a major dose (pun most definitely intended) of common sense and cold hard reality to this issue of the actual origins and practices of financial information sharing. After all, a government that clearly wasn’t able to make even the most rudimentary of accurate calculations and logical decisions regarding the dispensing of billions of dollars of Covid era recovery funds would be rather unlikely to be first in line with having the capability to monitor every citizen’s financial decisions and practices.
Little Brother (private companies) helping Big Brother (gubmint). Guess that’s why Big Brother let’s Little Brother keep on doing what they do.
Little Brother lives off Big Brother and Big Brother lives off us Big Schmucks. Do we see a pattern here of who ends up being the Big Loser?
Get rid of the coins use quarters if you must just go up or down depending on the amount of change or get rid of change all together
Until everyone makes use of electronic payments only, some change will be required.
Production of both pennies and nickels should be stopped immediately and permanently. In 1969, a person could buy a first-class US postage stamp for 6 pennies. You can’t even buy one for six dimes today.
Couldn’t agree more. Dimes and quarters are more than sufficient for our purposes.
Judging by the wear on 1870s Indians, the cent was worth almost what a dollar is today!
Actually, Andy, the purchasing power of one cent in 1870 would be equivalent to about twenty-three cents in buying capability now, but I get your drift because it means that about 4 1/3 cents could buy what it takes a full dollar to buy now.
Let’s hope the Inflation Reduction Act (Deflation Act) will finally do its job to bring down inflation and costs. That should help Mint with their job to mint monies cost effectively and hopefully then lower the prices of the prized proof coins we like to acquire. Please don’t hold your breath on this 😉 🙁
Your advisory should help us coin collectors avoid ending up with a blue complexion.
In Australia we removed the 1c and 2c coins in 1990. Everything just gets rounded to the nearest 5c if paying by cash, so you can still have a non-5c total (e.g. $18.97). If paying with credit card/electronically, you will be charged the exact amount. Please note that after this change was made, the sun still rose in the east. The penny is not a hill anyone needs to die on. The coins are still considered legal tender, but once they hit the banks, they are set aside and sent for destruction. After removal from circulation, the 1c & 2c… Read more »
What an ingenious way to make good use of the metal from the one and two cent coins!
Why not do away with pennies?
I think, Mark, that seems to be a popular position here, but sadly not so in Congress.
It’s like a game of chicken, though, as businesses and the public could simply stop using cents thus allowing them to self-abolish…but no one wants to go first 🙂
Businesses likely don’t give a hoot since the law is such that practically all of the tax dollars that pay for the over-priced cent come from the public anyway, and the public has trouble agreeing on how long their neighbor’s lawn should be allowed to get so there might be a certain lack of cohesiveness in that regard.
Do away with pennies, but then you have the issue of Nickels. They also cost more than their face value. Where do we stop? Get rid of currency altogether? To whom will I sell my coins to if there’s no longer demand?
Cents can be eliminated with simple rounding, while nickels can either be made of cheaper alternative metals or also scrapped through the use of bigger rounding. In either and/or any case, Antonio, the world won’t end and you can always sell your old cents as antiques rather than contemporary coinage. 🙂
When your bill comes to $10.01 and the cashier demands a penny or make $9.99 change for a 20 (a 5, 4 ones, 3 quarters, 2 dimes and 4 pennies) they don’t realize that if the customer uses a credit card, the swipe fee will be around 30 pennies. Rewards cards are enough incentive to use credit cards, adding avoiding a pocketful of useless pennies as an incentive to use credit cards just benefits the banks. Mastercard, Visa and the big banks are the big winner when everyone pays for their $2 cup of coffee with a card instead of… Read more »
The above cash transaction you described, Andy, the one where you end up with a full 99 cents in change, used to be my least favorite cash purchase result until it finally occurred to me that this is the very best way to find whatever circulating coins for your collection that you might just happen to be on the lookout for.
Two sides to every coin!
Canada rounds the value up or down to the nearest five cents. We could do that here, if only the quality of math taught in schools equaled the task.
I tend to look at it the other way around, which is that it is not the instruction that is at fault but rather the so-called students’ lack of any desire to learn anything worthwhile. Rooms full of texting, video game playing and blankly staring transfixed classes make for a nation of woefully undereducated citizens.
I totally agree about all of the fiscal reasons for ending the cent. However, I also really enjoy searching through rolls every now and then- so for that reason I’d hate to see it go away. I’ve found many old wheat ones, AUs, S-mints from 1968-1974, and even some dimes.
Borrowing an old phrase, to everything, Major D, there is a season.
It goes without saying (but obviously I’m about to say it anyway, bless my little heart) of course, Major D, that I absolutely share your love of and nostalgia for the formerly ready chances to come across and thereby acquire “old time” circulating coinage, but as with so many other things we once took for granted, that pleasure has now pretty well disappeared.
Now yall know full well they can’t stop making the cent. It would be racist. For one ot is the only brown coin. And second Lincoln is synonymous with AP AA History. They will have their peaceful protest barbecue across the nation, Ben Crump and Al Shartpants (the perpetual victims) will be there with gas cans and bottled oxygen. Yes it costs more to make it, but the other coins more than recoup the money. Silver at $21. They probably paid $10 for it (since they live dollar cost averaging) and sell it for flippers for $80 where meth mike… Read more »
It does seem ridiculous that with the penny costing almost three times its face value to produce, and besmirching up every storage place it gets put in, that the Congress would finally abolish this idiotically stupid and worthless coin.