Production costs still above face value for cent and 5-cent coins
- Published: Feb 10, 2015, 5 AM
Production costs for circulating Lincoln cents, Jefferson 5-cent coins, Roosevelt dimes and America the Beautiful quarter dollars all dropped during Fiscal Year 2014, resulting primarily from lower copper prices and increased quarter dollar shipments to the Federal Reserve.
FY2014 covers the period from Oct. 1, 2013, to Sept. 30, 2014.
According to the United States Mint 2014 Annual Report released Feb. 9, the production costs per denomination were:
- 1.66 cents for the cent, down from 1.83 cents in FY2013.
- 8.09 cents for the 5-cent coin, down from 9.41 cents.
- 3.91 cents for dime, down from 4.56 cents
- 8.95 cents for the quarter dollar, down from 10.5 cents.
Although costs declined, the cost to produce each copper-plated zinc cent and copper-nickel 5-cent coin still exceeded its face value for the ninth consecutive year.
The dime and quarter dollars are a copper-nickel clad composition, with outer layers of 75 percent copper and 25-cent nickel bonded to a core of pure copper.
While the average spot price for zinc increased 8.4 percent (to $2,080.92 per ton) and nickel increased 3.9 percent (to $16,394.01 per ton), copper prices fell 6.9 percent (to $6,993.38 per ton).
Circulating coin shipments by the U.S. Mint to the Federal Reserve Banks during FY2014 increased by 2.3 billion coins, to total 13 billion coins, and FY2014 shipments of quarter dollars increased by 58.5 percent, which increased total revenues and seigniorage generated.
"Seigniorage" is the difference between a coin’s face value (the price the Federal Reserve pays the Mint) and the cost the Mint incurs to produce the coin.
FY2014 circulating revenue reached $783 million, 35 percent higher than FY2013, primarily because of the increased quarter dollar shipments, and FY2014 seigniorage was $289.1 million, 110.4 percent higher than FY2013.
Additionally, “plant cost at the production facilities at Denver and Philadelphia decreased 5.2 percent, despite the 21.9 percent increase in coin production,” according to the 2014 annual report. “General and administrative costs increased slightly with increased research and development expenses. Seigniorage per $1 issued was 37 cents in 2014, up from 24 cents in FY 2013."
Bullion coin program revenue, net income and ounces sold dropped in FY2014 compared to the previous fiscal year.
Revenue totaled $1,814,400,000, down 44.1 percent. Net income decreased 52.8 percent, to $28 million.
The U.S. Mint reintroduced the sale of 1-ounce platinum American Eagle bullion coins in 2014, the first since 2008. The Mint sold 14,400 of the coins during FY2014.
Start-up costs resulted in an overall loss of $500,000 on the platinum bullion program.
Numismatic product sales jumped 200,000 units on FY2014, to 5.7 million units.
The sales jump was primarily the result of a 591,000 unit increase in commemorative coin sales with the 2014 National Baseball Hall of Fame commemoratives.
Numismatic product revenue decreased 1.5 percent to $512.4 million in FY2014. The drop was the result of lower silver spot prices which contributed to the drop in the retail price charged for each product.
Numismatic program net income and seigniorage slid 47 percent to $50.8 million in FY2014, primarily the result of a $32.7 million decrease in silver coin product earnings.
Gold and platinum numismatic products generated a 48.8 percent share of the total revenue for numismatic products.