Circulation coin production in May at the Denver and Philadelphia
Mints resulted in negative seigniorage of more than $1.77 million,
based on production costs cited in the Mint’s 2011 Annual Report.
The Mint struck cents, 5-cent coins, dimes and quarter dollars for
circulation during the month. Profits that were made in the production
of dimes and quarter dollars were offset by losses incurred for the
production of cents and 5-cent coins.
The two Mint facilities also struck circulation-quality
Presidential dollars for numismatic sales. When production of the
Presidential dollars is considered, the U.S. Mint realized positive
seigniorage of just over $15.9 million in May.
Seigniorage is the profit generated by the difference between a
coin’s face value and the cost to produce and distribute each coin.
For years, it has cost the U.S. Mint more than face value to
produce and distribute Lincoln copper-plated zinc cents and Jefferson
copper-nickel 5-cent coins. According to the U.S. Mint’s 2011 Annual
Report, it costs the Mint 2.41 cents for each cent, a loss in
seigniorage of 1.41 cents per coin, and 11.18 cents for each 5-cent
coin, a seigniorage loss of 6.18 cents per coin.
Based on the production of 538.8 million Lincoln cents and 103.92
million of the 5-cent coins in May, the cents generated negative
seigniorage of $7,597,080, and the 5-cent coins, $6,422,256 in
The cost to produce and distribute each Roosevelt copper-nickel
clad dime is 5.65 cents, based on the 2011 Annual Report figures,
representing positive seigniorage of 4.35 cents per coin. Total
positive seigniorage for May for the dime reached $5,089,500.
The America the Beautiful copper-nickel clad quarter dollars cost
11.14 cents each to produce and distribute into circulation,
generating positive seigniorage of 13.86 cents per coin. During May,
quarter dollar production generated positive seigniorage of $7,151,760.
The largest profit in May, $17,689,126, was generated by the
output of Presidential dollars. The coins are being struck in
circulation quality only for numismatic sales above face value. They
are not distributed into circulation by the Federal Reserve.
U.S. Treasury Secretary Timothy F. Geithner on Dec. 13, 2011,
suspended Presidential dollar production for circulation. The
suspension was based on Federal Reserve concerns over the expanding
inventory of more than 1.3 billion in Presidential dollars already
housed in Federal Reserve Banks and contracted coin terminals. That
quantity is believed to be more than enough to handle commerce needs
for the next 12 years without additional Presidential dollar production.
While the suspension of Presidential dollar production for
circulation is saving the U.S. Mint a reported $50 million to $75
million annually in production costs, reduced sales to the Federal
Reserve have resulted in reduction in the positive seigniorage by tens
of millions of dollars. Production of Presidential dollars in 2012
through the end of May totaled 42.3 million pieces; the total for the
first five months of 2011 was 148.68 million Presidential dollars.
No Native American dollars or Kennedy half dollars were struck in
May. Both coins, like Presidential dollars, are struck in circulation
quality only for numismatic sales.
Cumulative circulation-quality coin production figures are posted
monthly on the U.S. Mint website at www.usmint.gov. Click on the “About
Us” link on the top of the website’s Home Page and then click on the
link “Coin Production” on the left side of the second page.
In an effort to reduce production costs for U.S. coinage, the U.S.
Mint for the past two years has pursued composition alternatives as
called for under provisions of the Coin Modernization, Oversight, and
Continuity Act of 2010, Public Law 111-302.
The Mint has until Dec. 14, 2012, to submit to Congress its
findings and recommendations for composition changes. ■