Last year, the US Mint spent 2.1 cents to produce and distribute each Lincoln cent. The cost of the coin for each Jefferson nickel was 8.52 cents.
The price of producing US circulation coins has increased over the past year, with the exception of the half dollar, the United States Mint announced this month in its 2021 annual report. And for the sixteenth year in a row, the unit cost of cents and nickels was above face value.
The Mint minted nearly 15 billion coins for circulation during the fiscal year.
“Despite operating under ongoing restrictions due to COVID-19, the mint shipped 14.7 billion coins in circulation in fiscal 2021. This increased level of circulation coin production was necessary to meet the Federal Reserve’s increased coin orders,” according to the U.S. Mint’s annual report
In fiscal year 2021, the fee for producing, managing and distributing the 1 cent coin increased from 1.76 cents to 2.1 cents, while the cost of the 5 cent coin increased from 7.42 cents to 8.52 cents rose. Higher copper and zinc prices accounted for much of the rise.
“Compared to the prior year, average spot prices for nickel in fiscal 2021 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 $2,821.12 per tonne,” the US Mint noted.
Lincoln cents have a composition of 2.5% copper with the balance being zinc. Five cent coins are minted in 25% nickel with the balance being copper. Dimes, quarters and half dollars are each made up of 8.33% nickel and the remainder copper.
Cost of making dimes, quarters and half dollars
Unlike cents and nickels, the US Mint made money from distinctive dimes, quarters, and half dollars because the cost of producing and distributing them was less than their face value.
In fiscal 2021, the unit cost for the quarter increased from 8.62 cents to 9.63 cents and the unit cost of the dime increased from 3.73 cents to 4.39 cents. The unit cost of the half dollar, meanwhile, fell from 25 cents to 11.67 cents – helped by an increase in the number of half dollars manufactured and shipped to the Federal Reserve Banks.
The following two tables summarize the US Mint cost of the cent to the half dollar in fiscal years 2020 and 2021.
FY2021 unit cost of producing and distributing 1c, 5c, 10c, 25c, and 50c coins
|a dime||five cents||dime||quarter||Half Dollar|
|Cost of Goods Sold ($)||0.0181||0.0744||0.0386||0.0843||0.0917|
|Sales, General and Administration ($)||0.0026||0.0095||0.0047||0.0106||0.0167|
|Distribution to Reserve Banks ($)||0.0003||0.0013||0.0006||0.0014||0.0083|
|Total Unit Cost ($)||0.0210||0.0852||0.0439||0.0963||0.1167|
FY2020 unit cost of producing and distributing 1c, 5c, 10c, 25c, and 50c coins
|a dime||five cents||dime||quarter||Half Dollar|
|Cost of Goods Sold ($)||0.0151||0.0653||0.0326||0.0760||0.2500|
|Sales, General and Administration ($)||0.0022||0.0080||0.0042||0.0091||–|
|Distribution to Reserve Banks ($)||0.0003||0.0009||0.0005||0.0011||–|
|Total Unit Cost ($)||0.0176||0.0742||0.0373||0.0862||0.2500|
As a gain from seigniorage — the difference between face value and the cost of producing and distributing circulation coins — the cent earned $172 million in fiscal 2021, while the quarter brought in $349.3 million. (The US Mint transfers seigniorage to the Treasury General Fund to fund the national debt.) Relatively few half-dollars were produced for circulation compared to other denominations, but the US Mint still made $4.6 million from it.
In contrast, the cent and nickel have lost money since 2006.
Unit costs and seigniorage for cents and nickels from 2005 to 2021
|fiscal year||Unit cost in Lincoln cents||Jefferson Nickel Unit Cost||Combined 1c and 5c seigniorage (in millions)|
The US Mint produces and issues circulation coinage in volume to Federal Reserve Banks to support their service to commercial banks and other financial institutions. FY2021 saw both an increase in production and a decrease in denominations compared to the previous year. In summary, the coin delivered overall:
- 7.613 billion cents, down 6.8% year-on-year;
- 1.736 billion nickels, up 8.6% year-on-year;
- 3.066 billion dimes, up 9.5% year-on-year;
- 2.274 billion quarters, down 21.8% year-on-year; and
- 12 million half dollars compared to no shipments last year.
The five denominations add up to 14.701 billion coins, down 5% from the 15.479 billion coins shipped in fiscal 2020.
The Fed pays face value for every coin it receives, and as such, the US Mint’s circulating earnings for fiscal 2021 totaled $1,044 million, down 10.7% from $1,168.5 million in the 2020 financial year.
2021 coin shipping, costs and seigniorage
(coins and dollars in millions)
|a dime||five cents||dime||quarter||Half Dollar||Mutilated & Miscellaneous||total|
|value of shipments||$76.1||$86.8||$306.6||$568.5||$6||–||$1,044.0|
After deducting the annual cost of producing the coins, which totaled $662.8 million, the US Mint’s circulating profit or seigniorage totaled $381.20 million, a decrease of 168, $7 million, or 30.7%, from $549.9 million in fiscal 2020.
The federal government works with a fiscal year that begins on October 1st and ends on September 30th.
Article Source : https://www.coinnews.net/2022/01/18/penny-costs-2-1-cents-to-make-in-2021-nickel-costs-8-52-cents-us-mint-realizes-381-2m-in-seigniorage/