For the past four years, it has cost the United States Mint more than face value to produce the penny and the nickel. The cost of the coins was recently 1.62 cents to produce each penny and 5.79 cents to produce each nickel.

The United States Mint produces and issues coins for circulation, which are distributed through the Federal Reserve Banks in quantities needed to replenish inventories and meet the needs of commerce. The Mint recognizes revenue based on the face value of coins as they are shipped. Seigniorage arises from the difference between the face value and the cost to manufacture and distribute the coins. Amounts earned through seigniorage are transferred to the United States Treasury General Fund.

Since 2006, it has cost more than face value to produce the cent and nickel due to the increased costs of base metals. The current composition of the cent is 2.5% copper and 97.5% zinc. The current composition of the nickel is 75% copper and 25% nickel.

Historical Cost of Producing the Penny

Fiscal Year US Mint Cost Seigniorage (millions)

2009 0.0162 $ (19.8) 2008 0.0142 $ (22.2) 2007 0.0167 $ (40.1) 2006 0.0121 $ (18.3) 2005 0.0097 $ 2.0 2004 0.0093 $ 4.6 2003 0.0098 $ 1.0 2002 0.0089 $ 8.8 2001 0.0080 $ 24.6

Historical Cost of Producing the Nickel

Fiscal Year US Mint Cost Seigniorage (millions)

2009 0.0579 $ (2.2) 2008 0.0877 $ (24.8) 2007 0.0949 $ (58.5) 2006 0.0597 $ (14.6) 2005 0.0484 $ 2.4 2004 0.0456 $ 6.1 2003 0.0321 $ 8.9 2002 0.0332 $ 21.9 2001 0.0331 $ 28.2

Although producing and distributing cents and nickels has generated losses each year, the gains from other denominations more than make up for the losses.

In the most recent fiscal year, the US Mint lost a combined 22 million on production of the cent and nickel. The gains from other denominations more than made up for this amount. Last year, the United States Mint shipped a total of $777.6 million in circulating coins, which earned $427.8 million in seigniorage.