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 Replies: 11 / Views: 2,164 |
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Pillar of the Community
527 Posts |
http://news.coinupdate.com/cost-to-...-rises-1139/Quote:
The cost for the United States Mint to produce and distribute the cent and nickel rose to their highest levels, and are now more than double the respective face values. For the fiscal year ending September 30, 2011, the unit cost for the cent was 2.41 cents and the cost for the nickel was 11.18 cents.
The cost for the two lowest circulating denominations increased compared to the prior year due to higher material costs and a change in the method of allocation for sales, general, and administrative expenses. In previous years, the Mint allocated SG&A expenses based on gross margins. For the 2011 fiscal year, costs were allocated based on the costs to manufacture, market, and distribute. The new approach conforms to accounting standards and leading commercial and public sector practices.
This represents the sixth year in a row that the cost to produce and distribute the cent and nickel have exceeded their face values. For the 2011 fiscal year, the two denominations were produced at a loss of $116.7 million. This amount is nearly triple than the loss of $42.6 million generated from the two denominations during the prior year.
From 2006 to 2011, the cent and nickel have now generated losses of $359.80 million.
Fiscal Year Cent Unit Cost Nickel Unit Cost Seigniorage (millions)
2011 0.0241 0.1118 ($116.70)
2010 0.0179 0.0922 ($42.60)
2009 0.0162 0.0603 ($22.00)
2008 0.0142 0.0883 ($47.00)
2007 0.0167 0.0953 ($98.60)
2006 0.0121 0.0597 ($32.90)
Total ($359.80)
Although the cent and nickel have generated significant losses in recent years, the positive seigniorage generated by higher denomination circulating coins has offset the losses. For the 2011 fiscal year, production of the dime, quarter dollar, and $1 coin for circulation generated seigniorage of $488.8 million.
In December 2010, Congress passed the Coin Modernization, Oversight, and Continuity Act of 2010, which authorizes the Treasury Department to conduct research and development activities with regards to circulating coin compositions. Any changes in composition would still need to be accomplished by an act of Congress. The US Mint has engaged a contractor to conduct the research and development, which will serve as the basis for the report to Congress due in December 2012.
On December 15, 2011, Rep. Steve Stivers introduced two bills which would require the the composition of the cent and nickel to be produced primarily of steel within 90 days of enactment. The bills have two cosponsors and both been referred to the House Committee on Financial Services.
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Pillar of the Community
United States
1150 Posts |
 You are so funny dude. Gonna stock up on nickels now? |
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Pillar of the Community
 527 Posts |
Quote:
You are so funny dude. Gonna stock up on nickels now? When I saw that you had made the first post, I had a feeling it was going to be an insult. Good to see that I do not stand corrected. But to answer your rhetorical question: No, I am not. |
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Bedrock of the Community
United States
10034 Posts |
Since the whole thing is handled by the fed, the solution is simple! Cut out just half of the guaranteed-to-exist red tape and beauracracy involved and the price would probably be lowered by 99%  |
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Valued Member
United States
90 Posts |
1 dollar worth of copper pennies Values Used: Total Face Value: $1 Coin Type: 1909-1982 Lincoln Copper Cent Copper Price: $3.4107 / pound Zinc Price: $0.8259 / pound Answer: Total melt value is $2.25. Statistics: » There are 0.6514 pounds of copper and 0.0343 pounds of zinc in $1 face value of copper cent(s). » A roll of copper cent(s) has 50 coins and is valued at $1.12 when copper is at $3.4107 / lb and zinc at $0.8259 / lb (exact value is $1.1249462365782). 1 dollar worth of nickels Values Used: Total Face Value: $1 Coin Type: 1946-2011 Jefferson nickelCopper Price: $3.4107 / pound Nickel Price: $8.4014 / pound Answer: Total melt value is $1.03. (Exact value is $1.0269958897443. $0.4630479119917 worth of nickel, $0.56394797775255 of copper.) Statistics: » There are 0.1653 pounds of copper and 0.0551 pounds of nickel in $1 face value of nickel(s). » A roll of nickel(s) has 40 coins and is valued at $2.05 when copper is at $3.4107 / lb and nickel at $8.4014 / lb (exact value is $2.05399). |
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Bedrock of the Community
Australia
21786 Posts |
There is an increasing trend around the World to issue plated base metal coins.
More commonly, that base metal is iron or steel. The plating tends to be more traditional in keeping with the original appearance of the coin.
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Bedrock of the Community
United States
17884 Posts |
Quote:
For the 2011 fiscal year, the two denominations were produced at a loss of $116.7 million. This amount is nearly triple than the loss of $42.6 million generated from the two denominations during the prior year. So what do they do? Discontinue the dollar coin for circulation in order to "save" $50 million. Forgetting that the seniorage profit of $210 million from those dollar coins offsets that $116.7 million dollar loss. You go from a $93.3 million dollar profit (plus whatever the profit from the dimes and quarters is) to a $116.7 million dollar loss less whatever the dime and quarter profit is. And the profit from the dimes and quarters is down due to lower mintages. |
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Moderator
 United States
188052 Posts |
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Pillar of the Community
United States
1150 Posts |
This is why I don't like typing conversations. That was NOT meant to be an insult, just a little ribbing.
No harm intended.
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Pillar of the Community
United States
3276 Posts |
Lol, text can me mistaken sometimes. I texted my wife the other day and she asked if I was trying to be rude or hurt her feelings. It was something that was not rude at all, but sometimes reading text can be read different ways.
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Pillar of the Community
United States
1027 Posts |
JGray44, using your numbers, the current cent only contains about 0.42 cents worth of metal. It doesn't look like changing the content would make the coin any cheaper, with most of the cost in production and distribution. Even if it were made of air, it would still cost more than face value to get into circulation.
I honestly don't understand the alarm when a coin costs more to get into circulation than its face value. This was the case for all coins (at least from the dime up) prior to 1965. The silver dollars and all gold coins contained their face value in precious metal so when you add the cost of minting and distribution, these coins had always cost more to get into circulation than face. Even for the fractional silver, which contained about 94% of face in silver, the cost to circulation exceeded face, most if not all, of the time.
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Bedrock of the Community
United States
20753 Posts |
This subject comes up constantly. Regardless of how much it cost to produce Cents, Nickels, Dimes, etc. it really makes little difference since our entire government is run on tax money. So if it cost a dollar to make a cent, they really don't care or so it appears. There are articles all the time about this and yet it goes on and on and on. My prediction is the Cent will be made as is until it costs over $10 to make one. And even then, MAYBE. And too as so many other discussions have been about the end of the present monitary systme, eventually there will be no CENTS, only plastic cards. It is only due to gum ball machines still needing coins that this hasn't happened yet.  |
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Replies: 11 / Views: 2,164 |
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Posted 01/02/2012 11:07 pm
