In an unexpected move, the United States Mint has announced reduced pricing for the upcoming 2012 commemorative coins.
Price levels were previously announced through a publication in the Federal Register published on January 26, 2012 and dated January 19. The new prices were announced in a separate notice published today and dated February 3, 2012.
The uncirculated silver dollars will now carry an introductory price of $44.95 each and a regular price of $49.95. The proof silver dollars will have an introductory price of $49.95 and a regular price of $54.95. The new price levels represent a reduction of $5 per coin from the prices previously published.
The latest notice also includes the “Infantry Solider Silver Dollar Special Set” priced at $51.95. The previous notice had included the “Defenders of Freedom Set” priced at $61.95. It is not clear whether the newly published price refers to a different product or the same product. Also included in the latest notice is the “Star-Spangled Banner Bicentennial Silver Dollar Set” priced at $53.95.
No changes have been indicated for the $5 gold coins or the Star Spangled Banner Two Coin Set, which were included in the last notice. Prices for these products are based on a grid and will be adjusted weekly based on the average market price of gold.
The price reductions come as a surprise, since the market price of silver has risen by $3 per ounce between the date of the original notice and the latest notice. The US Mint’s pricing for silver numismatic products has been somewhat perplexing lately.
When the US Mint announced pricing reductions earlier this year, the press release stated, “The bureau was able to set these lower prices and maintain others by refining the product costing process, taking advantage of current lower prices for precious metals and negotiating better pricing from its suppliers.”
In addition to the impact of precious metals prices, I think some of the recent price changes may have had a lot to do with “refining the product costing process.”
Within the US Mint’s 2011 annual report, they had described a change in the method of allocation for sales, general, and administrative expenses. In previous years, these costs were allocated based on gross margin. From fiscal 2011 onwards, the costs are allocated based on the costs to manufacture, market, and distribute each product. The impact of the change was very apparent for circulating coin production costs, with a large increase in the amount of SG&A expenses allocated to the cent and a large decrease in SG&A allocated to the $1 coin.
This is just speculation, but perhaps for numismatic products, the US Mint had been greatly underallocating expenses to high ticket gold and platinum products and overallocating expenses to lower priced silver and clad products. After the allocations were refined, the US Mint’s “cost” to make certain products was lower, allowing prices to be reduced.
Whatever underlying reasons, lower prices for silver numismatic products will certainly be a welcome change for many collectors.
The 2012 Infantry Soldier Silver Dollars are expected to go on sale February 16, 2012. The 2012 Star Spangled Banner Silver Dollars and $5 Gold Coins are expected to go on sale March 5, 2012. There will be dedicated posts for each of the programs closer to the release date.