The cost of producing U.S. circulating coins fell for a fourth straight year, the United States Mint disclosed in its 2015 Annual Report.
That said, the price to make and distribute the nation’s two smallest coins, the Lincoln cent, and Jefferson nickel, remained well above their face values. Their metallic compositions are the main cost drivers. The U.S. Mint has studied alternative metal alloys in an effort to cut costs. Viable solutions have proven to be elusive.
For the Mint’s fiscal year ending September 30, 2015, the total unit cost to produce, administer and distribute the cent was 1.43 cents compared to 1.66 cents in 2014. Similarly, the nickel’s costs totaled 7.44 cents versus 8.09 cent from a year earlier.
"Compared to FY 2014, we reduced the per unit cost of producing the penny by 13.9 percent; the nickel by 8.0 percent; the dime by 9.5 percent; and the quarter by 5.7 percent," Rhett Jeppson, principal deputy director of the United States Mint, noted in the forward of the annual report.
Improved efficiency and lower metal prices contributed to their declines, which boosted overall gains in seigniorage. Seigniorage is the difference between the face values of coins and their costs.
"We also returned $550 million in seigniorage to the Treasury General Fund in FY 2015, more than double the amount we returned last fiscal year," Jeppson said.
The U.S. Mint made money on dimes and quarters, with their total unit costs at 3.54 cents and 8.44 cents. These compare to FY 2014 tallies of 3.91 cents and 8.95 cents.
For the FY 2015, the U.S. Mint shipped to Federal Reserve Banks a total of:
- 9.155 billion cents;
- 1.477 billion nickels;
- 2.874 billion dimes; and
- 2.645 billion quarters.
The four denominations combined to 16.151 billion coins, marking a 23.9% increase over the 13.037 billion coins delivered to Fed banks in FY 2014.
Unit Cost to Produce and Distribute Lincoln Cent
| FY 2014 | FY 2015 | |
| Cost of Goods Sold | 0.0143 | 0.0125 |
| Sales, General & Administrative | 0.0021 | 0.0015 |
| Distribution to Reserve Banks | 0.0002 | 0.0003 |
| Total Unit Cost | 0.0166 | 0.0143 |
Unit Cost to Produce and Distribute Jefferson Nickel
| FY 2014 | FY 2015 | |
| Cost of Goods Sold | 0.0699 | 0.0664 |
| Sales, General & Administrative | 0.0102 | 0.0068 |
| Distribution to Reserve Banks | 0.0008 | 0.0012 |
| Total Unit Cost | 0.0809 | 0.0744 |
The two smallest U.S. coins have lost money since 2006.
Unit Costs and Seigniorage for Cent and Nickel from 2005 to 2015
| Fiscal Year | Cent Unit Cost | Nickel Unit Cost | Seigniorage (in millions) |
|---|---|---|---|
| 2005 | 0.0097 | 0.0484 | $4.40 |
| 2006 | 0.0121 | 0.0597 | ($32.90) |
| 2007 | 0.0167 | 0.0953 | ($98.60) |
| 2008 | 0.0142 | 0.0883 | ($47.00) |
| 2009 | 0.0162 | 0.0603 | ($22.00) |
| 2010 | 0.0179 | 0.0922 | ($42.60) |
| 2011 | 0.0241 | 0.1118 | ($116.70) |
| 2012 | 0.0200 | 0.1009 | ($109.20) |
| 2013 | 0.0183 | 0.0941 | ($104.50) |
| 2014 | 0.0166 | 0.0809 | ($90.50) |
| 2015 | 0.0143 | 0.0744 | ($74.40) |
I’m still trying to figure out why they’re looking into changing the compositions of the dime, quarter, and presumably half-dollar. Their content value is only about 10% of their face value. Even when adding in the other costs, they’re making quite a profit on them already. The Mint’s risking counterfeiting and/or the importation of cheap foreign coins if their metal and face values diverge too much. I think the only reason Sacagawea dollars are not being widely counterfeited (metal value is only 4% face value) is because they don’t circulate. Of course the elephant in the room are how worthless… Read more »
Simple solution, switch the composition and size of the dime and nickel. Bulk of the problem solved. Why is it so difficult for our leadership to not see the obvious? No new equipment, no costly experiments with metal alloys, simply new designs and some public education.
Well it’s nice to see that Jepson was able to excel in something. He certainly seems to be failing in collector coin quality and costly packaging errors that if unmentioned would have likely gone unnoticed.
I think Jepson was only “excelling” at this because of all the attention by the elected officials, mainstream media, etc. on the fact that it cost more to make the cent and nickel than they’re worth … and he’d better show results or he’d be out of a job.
If only there was such attention even a tiny fraction, to collector coins and packaging … but as long as the Mint is making money they don’t care … and until the lawmakers start asking questions it will be the same old same old screw the collector …
Jim, Tinto: Amen to that! My 2 cents is that eliminating the penny is the only step that wouldn’t force significant changes to the rest of our coinage system. So long as we have quarters and people refuse to use half dollars there’s no way the nickel can be retired. That would leave only two circulating denominations, one of which isn’t a multiple of the other – highly impractical for making change. One rationalization would be to parallel New Zealand’s denominations of 10, 20, and 50 cents, and $1 and $2 coins. That would make for a truly decimal system… Read more »
So looking at the numbers, I wonder if anybody questioned why it costs so much to sell (sell???) pennies and why almost 5 times as much to sell nickels. In the end they’re both coins to the mint which aside from their size, color, and metallic content should be indistinguishable from one another. I think the mint is cooking the books to justify their expenses. Maybe someone out there is up on coinage law but I don’t remember any proposed laws to abolish the penny (and nickel?) recently for congress to take a position on and let people know how… Read more »
Munzen & other interested CoinNews readers – We have agreed about the cent discussion before & the Crane & Co. “paper” (75% cotton, 25% linen material matrix made in the old paper pulp manufacturing method) monopoly. CNN International news cable station has a very short 5 minute news bit on the Fareed Zakaria GPS show today that replays at 2pm Central Time today Sunday, February 21 during the last 5 minutes of the 1-hour show and should be on CNN.com under “money”. Last week Harvard University issued a study about high denomination banknotes & recommended getting rid of the high… Read more »
Seth, thanks so much for your insights. I can’t state my feelings about Jeppson any better than you have. At least based on current spot prices for Zn/Cu/Ni, the raw-metal cost of a cent has dropped to slightly less than 0.5¢ per coin, while a nickel is down to about 2.8¢. Assuming I’ve done my arithmetic correctly the rest is all manufacturing and distribution. Jeppson sounds like the fabled rooster who took credit for making the sun rise. Based on my admittedly limited experiences here and in the EU I don’t think too many people would miss either the $100… Read more »
Munzen – Your stats & comments are right on mark for sure. It may surprise most “Americans” but as you stated, 60% of all USA Federal Reserve Notes printed by both BEP factories in Washington D.C. & Ft. Worth, Texas are held outside the shores of the USA by foreign central banks & by large corporations/investment firms & by individuals in safe deposit boxes & in mostly former Eastern Bloc countries in mattresses (literally) ! This is of course because the U.S. dollar is the most stable currency in the world. If the Treasury Dept. ever decided to get rid… Read more »