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.