The overall price of producing U.S. circulating coins fell for a fifth straight year even as the cost of making cents and nickels remained above their face values for an eleventh year in a row, the United States Mint disclosed in its recently published 2016 Annual Report.
The unit cost to produce, administer and distribute the 1-cent coin totaled 1.50 cents compared to 1.43 cents from a year earlier.
Lower metal prices helped the 5-cent coin with its unit cost easing to 6.32 cents from 7.44 cents in 2015, as did its year-over-year production climb of more than 7%.
"By keeping indirect costs down while meeting increased demand, fixed costs were spread among more units," the Mint’s annual report said.
"Compared to last year, FY 2016 average spot prices for nickel decreased 30.9 percent to $9,264.43 per tonne, average copper prices fell 19.6 percent to $4,766.68, and average zinc prices decreased 10.4 percent to $1,868.28," it added.
Lincoln cents are composed from 2.5% copper with the balance zinc while 5-cent coins are made from 25% nickel with the balance copper.
Obviously, metallic coin compositions are always key cost drivers. The U.S. Mint has studied alternative alloys in an effort to cut costs but viable solutions have proven elusive.
Cost to Make Dimes and Quarters
The U.S. Mint made money on dimes and quarters with their respective unit costs at 3.08 cents and 7.63 cents. These compare to their FY 2015 amounts of 3.54 cents and 8.44 cents.
The following two tables summarize U.S. Mint costs for the cent through quarter, with the first table for FY2016 and the second one for FY2015:
FY 2016 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
| One-Cent | Five-Cent | Dime | Quarter | |
| Cost of Goods Sold ($) | 0.0131 | 0.0551 | 0.0269 | 0.0672 |
| Sales, General & Administrative ($) | 0.0017 | 0.0071 | 0.0034 | 0.0080 |
| Distribution to Reserve Banks ($) | 0.0002 | 0.0010 | 0.0005 | 0.0011 |
| Total Unit Cost ($) | 0.0150 | 0.0632 | 0.0308 | 0.0763 |
FY 2015 Unit Cost to Produce and Distribute 1c, 5c, 10c, and 25c Coins
| One-Cent | Five-Cent | Dime | Quarter | |
| Cost of Goods Sold ($) | 0.0125 | 0.0664 | 0.0315 | 0.0755 |
| Sales, General & Administrative ($) | 0.0015 | 0.0068 | 0.0033 | 0.0076 |
| Distribution to Reserve Banks ($) | 0.0003 | 0.0012 | 0.0006 | 0.0013 |
| Total Unit Cost ($) | 0.0143 | 0.0744 | 0.0354 | 0.0844 |
The two smallest U.S. coins have lost money since 2006.
Unit Costs and Seigniorage for Cent and Nickel from 2005 to 2016
| 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) |
| 2016 | 0.0150 | 0.0632 | ($66.8) |
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. The year saw production increases in all denominations except for the cent and quarter. The bureau delivered a total of:
- 9.114 billion cents, down 0.5% from the previous year;
- 1.587 billion nickels, up 7.5% from the previous year;
- 3.134 billion dimes, up 9.1% from the previous year; and
- 2.482 billion quarters, down 6.2% from the previous year.
The four denominations combined to 16.308 billion coins, marking a 1% increase over the 16.151 billion coins delivered in FY 2015. The Fed pays face value for each coin they receive, with the Mint resultantly realizing FY 2016 circulating revenue of $1.1042 billion.
Coin Shipments, Costs and Seigniorage
(coins and $ in millions)
| One-Cent | Five-Cent | Dime | Quarter | Mutilated & Other | Total | |
| Coins Shipments | 9,114 | 1,587 | 3,134 | 2,482 | – | 16,308 |
| Value of Shipments | $91.1 | $78.9 | $313.4 | $620.8 | – | $1,104.2 |
| Gross Cost | $137.1 | $99.7 | $96.4 | $189.4 | $2.9 | $525.5 |
| Seigniorage | ($46.0) | ($20.8) | $217 | $431.4 | ($2.9) | $578.7 |
After subtracting the year’s cost to produce all four coins, which totaled $525.5 million, the U.S. Mint’s circulating profit or seigniorage reached $578.7 million for a 7% increase over the previous year. The resulting seigniorage per dollar issued reached $0.52, exceeding the prior year’s $0.49.
Have you noticed how many of the newer Lincoln cents – with the shield on the back – are corroded? I’ve noticed quite a few of these appear in very poor condition, despite being only a few years old and showing little wear from circulation.
Perhaps somebody needs to show our new President a handful of these poor-quality coin and point out that we are making these defective coins at a loss to the government. This problem would likely get fixed sooner rather than later, I’d wager.
Why not just stop production of the money losers? Canada already said au revoir to the penny. Maybe there could be some national call-in of pennies and nickels that are stowed awayin piggy banks, closets and basements. I’d rather have fresh greenbacks, anyway!
Agreed. The new penny looks horrible only a short time after mintage. Who wants to collect a poor quality coin? We can do much better here.
Mike Unser, Do you have or can you get data on like the Canadian mint cost to produce its coins? It might be interesting to comparison their cost against the US cost.
Also Mike do you have like data on what it cost to produce, distribute etc on Gold and other precious metals from West Point and the Acadian mint.
Thank you for this interesting data set.
Bilelle
Mammoth, you’re right if he can put his picture on the obverse (maybe groping Liberty on the reverse). Gilt plate them too and you’ll have something, just like the late night “commemorative opportunities”. But it is surprising that nickels still have their high copper composition. Every now and then somebody says to put away bank boxes of them because they will be withdrawn. I suppose someday it could happen. Personally I’ve been keeping the high copper composition Lincolns, being old enough to remember when silver disappeared. But the margin there is so narrow it’s barely worth it and anyway they… Read more »
FYI – When the price of base metals started spiking above face value for the cent & 5-cents coins in 2006, the Mint Director, Treasury Secretary & Congress got involved & made it illegal to melt any cents or nickels & even put a limit on how many you can take out of the USA! Therefore, we don’t really even legally totally “own” any circulating cents or nickels anymore to do with what we want (only in America! LOL). It is simply insane for Congress to continue to allow the production of any more cents. They cannot purchase anything, cannot… Read more »
They should get rid of the penny, dime and quarter and just go to a nickel and 20 cent coin. The nickel should be made dime like to reduce the cost of it.
This won’t win any votes from collectors but will help with the expense associated with the current way.
T
We could do this, make a copper penny for the mint and proof sets and raise the price by $1 or $2 for the sets and that could off set the cost of the pennies.
Nothing’s going to change so long as so many vested interests and naysayers want to keep the current system. We need to get Congress out of the picture so that decisions don’t depend on whoever shouts the loudest. Lots of other countries have changed sizes and denominations without ending civilization as we know it. The most common scheme is a simple, fully-decimal set in ratios of 1:2:5 with distinctive metals and sizes/shapes. There’s no reason we should continue to base coins’ sizes on their former silver content or issue a non-decimal 25¢ coin for compatibility with Spanish bits. Even Canada… Read more »
Greetings, I am currently researching the pros and cons of minting the one-cent coin in order to write up a persuasive speech about the issue for my public speaking and debate class. Where can I find the sources used in this article? I have already searched Google, but alas have come up blank. Not even the Us Mint website has been of any help. Thank you in advanced.
Solomon – Welcome to this forum. The Mint is, strangely, not always the best or easiest source of numismatic information. The largest numismatic publication (since 1960) is “Coin World” with a weekly newspaper, monthly magazine & daily online publication with subscribers in all 50 states & about 40 foreign countries. CW Editor William T. Gibbs has been there since 1976 & has an encyclopedic mind when it comes to numismatics. He can be reached by phone at 937-498-0853 M-F or by email at: cweditor@amosmedia.com at their Sidney, Ohio headquarters. As a professional, unbiased journalist, I am sure he will guide… Read more »
I’ve been carrying the four 2009 cents and one 2010 cent in my pocket as I go about my business for almost seven years now to see how they take wear since they’re unlikely to ever show natural wear from circulation (most cents I encounter dated later than 1964 show little to no wear). I’ve noticed the zinc cents don’t corrode provided they’re kept in constant circulation. If the zinc gets exposed on a little used cent, it will quickly corrode but constant circulation wear keeps the corrosion from taking hold. If the cent (and let’s face it, nickels, dimes,… Read more »