Annual report details Mint results for 2010

Customer base erodes because of sales problems
Published : 01/31/11
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The U.S. Mint’s numismatic customer base was eroded during Fiscal Year 2010 because of the bureau’s inability to offer key gold and silver products after January 2009, primarily Proof American Eagle 1-ounce gold and silver coins.

According to the Mint’s recently released 2010 Annual Report, the numismatic customer base totaled 798,515 in FY2010, below the target of 976,000 customers and down from a numismatic customer base of 1.06 million in FY2009.

FY2010 covers the period from Oct. 1, 2009, through Sept. 30, 2010.

The Mint did not offer Proof 2009-W American Eagle gold and silver coins because all planchets for the program were diverted to bullion coin production to meet statutory mandates. By the end of FY2010, the Mint was able to significantly expand its planchet procurement to permit resumption of Proof American Eagle output in calendar 2010.

“Releasing popular gold and silver numismatic products is expected to improve customer retention and acquisition as well as customer satisfaction in FY2011,” according to the 2010 Annual Report. “

Bullion coins

Demand for gold and silver bullion coins reached record highs during FY2010, significantly surpassing the previously unprecedented levels achieved during FY2009.

The Mint recorded sales of 35.8 million ounces of gold and silver bullion coins combined in FY2010, up 8.2 million ounces from the previous FY2009 record of 27.6 million ounces.

Another factor — rising gold and silver prices — added to the Mint’s bullion coin revenue during FY2010. The average spot price of gold and silver in FY2010 increased 29.2 percent and 40.1 percent, respectively, over FY2009 levels.

Total bullion revenue at the Mint reached a record high of $285,540,000 in FY2010, up $116,060,000, or 68.5 percent, from $169,480,000 in FY2009.

Circulating coinage

While the total number of circulating coins shipped to Federal Reserve Banks increased 3.7 percent to nearly 5.4 billion coins during FY2010, the composition of the denominations in the shipments shifted toward lower denomination coins, reducing the total face value.

The total dollar value of circulating shipments to the Federal Reserve dipped 20.5 percent to $618.2 million.

“Weak economic conditions that reduced shipments and revenue in FY2009 continued through the first half of FY2010,” according to the 2010 Annual Report. “This reversed midway through the fiscal year as retail activity recovered and FRB coin inventory fell. Shipments to the FRB in the second half of FY2010 were three times those in the first half of the fiscal year.”

Demand for cents, 5-cent coins and dimes picked up during the second half of 2010, with shipments of cents and 5-cent coins increasing 8.4 percent and 73.4 percent, respectively, in FY2010 from FY2009.

Dime shipments more than doubled over this period, increasing 147.8 percent.

Quarter dollar shipments, primarily of America the Beautiful coins, served to fill collector demand rather than commercial needs since FRB inventory was sufficient to meet commerce demands.

Shipments of quarter dollars fell 73.9 percent to 252 million in FY2010 from 965 million in FY2009.

Dollar coin shipments dropped 9.8 percent to 414 million in FY2010 from 459 million in FY2009.

Production costs still rising

FY2010 represented the fifth consecutive fiscal year that the production costs for the cent and 5-cent coin exceeded their face value.

Five-cent coin production costs increased 2.3 cents from FY2009, increasing the cost 52.9 percent to 9.2 cents in FY2010. The cost to produce the cent totaled 1.76 cents, up from 1.62 cents in FY2009.

To view the complete 2010 Annual Report, visit the Mint’s Web site link at ■

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