Note: This post was updated on 2/16/17 at 7:00 p.m. to split bullet point #3 into what are now bullet points #3 and #4.—Editor
The United States Mint has released its annual report for fiscal year 2016. As stated in the introductory letter from Rhett Jeppson, who was principal deputy director of the Mint until his resignation on January 20, 2017, the Mint performed solidly last fiscal year. Jeppson makes particular note of the following:
- 100% of the more than 16 billion circulating coins ordered by the Federal Reserve Bank were shipped on time.
- Demand for silver bullion coins remained strong, surging late in the year. Almost 44 million ounces of gold, silver, and platinum bullion were sold in FY 2016, a slight decrease from the record-setting 49 million ounces sold in FY 2015.
- The numismatic product line remained profitable by controlling costs, resulting in earnings of $34.5 million.
- Due to the success of each product line, the Mint was able to transfer more than $550 million to the Treasury General Fund this year.
- The Financial Department remains strong; for the 24th consecutive year, independent auditors returned an unmodified or “clean” audit on the Mint’s financial statements.
- The Mint developed and introduced a five-year strategic plan with three key goals: 1) fostering a safe, flexible, diverse, and engaged workforce; 2) improving enterprise management and governance; and 3) integrating technology into operations and support lines.
- The Mint developed and initiated a new program to reimagine the process of numismatic product development from concept to final production and launch.
- Customer satisfaction rose, and continues to rise as a result of improvements to the experience of purchasing numismatic and bullion products.
- Increased use of the mobile app, faster delivery of products, and updated order tracking have made buying Mint products easier and more convenient.
In addition to circulating, numismatic, commemorative, and bullion coinage, in FY 2016 the Mint produced four Congressional Gold Medals. These commemorated the World War II “Monuments Men,” the 1965 Selma to Montgomery Voting Rights Marches, the U.S. Army 65th Infantry Regiment “Borinqueneers,” and the St. Regis Mohawk Tribe and Pueblo of Laguna Tribe Native American Code Talkers. The Mint also received three 2016 World Coin News awards, including Coin of the Year, for its 2014 National Baseball Hall of Fame commemorative coin.
In FY 2016, the Mint’s shipments of circulating coins to the FRB increased by 1% over the prior year, bringing the 2016 total to 16.3 billion coins. Shipments of pennies and quarters decreased by 2%, while shipments of nickels and dimes increased by 2%. The total value of all shipments last year was $1,104.2 million; this was almost a full percentage point lower than the previous year, thanks to a $40.5 million (6.1%) decrease in quarter-dollar shipments.
With respect to seigniorage on circulating coins, the total for FY 2016 was up 7% from FY 2015, bringing the final figure to $578.7 million. The increase in seigniorage was largely attributed to lower metal and production costs. The average spot price for nickel in 2016 decreased 30.9%, while copper decreased 19.6% and zinc decreased 10.4%. Nonetheless, the unit cost for pennies and nickels remained above their face value (at 1.5 cents and 6.32 cents, respectively) for the 11th straight fiscal year.
Precious-Metal Bullion Coinage
In FY 2016, the Mint sold 45,163,000 ounces of bullion, down 4,585,000 ounces (9.2%) from the previous, record-breaking year. Revenue from the bullion program dropped from FY 2015’s $2,126.1 million to $2,085.3 million—a decrease of 1.9%. Net income for FY 2016 was $55.3 million, down 9.3% from $61 million.
Gold Bullion—Gold-bullion sales stayed flat compared to FY 2015, coming in at 1,018 thousand ounces. This includes a 1.1% increase in American Gold Eagle ounces and a 4.3% drop in gold Buffalo ounces. Revenue from gold bullion increased overall by 3.7%, to $1,277.9 million, thanks to a 5.5% increase in AGE revenue. Gold Buffalo revenue, however, dropped by 3.2%. From a net-income perspective, gold bullion decreased $1.2 million (4.6%), thanks to a $0.9 million (4.1%) drop in AGE earnings. Gold Buffalo earnings fell by $0.3 million (6.7%).
Silver Bullion—Silver-bullion sales dropped by 9.4%, to 44,125,000 ounces. American Silver Eagle sales, in particular, fell by 11.3% compared to 2015. Net income from silver bullion decreased by 10.8%, thanks to a $4.1 million drop in ASE earnings—this despite a $0.3 million (37.5%) increase in earnings for America the Beautiful 5-ounce silver bullion coins. The better part of ATB sales came from the year’s first issue, the Shawnee National Forest coin. Shawnee’s sales (525,000 ounces) were the highest for any single ATB 5-ounce coin since the 2011 Glacier National Park and Gettysburg Military Park issues (at 633,500 ounces each). ASE revenue was down by $120.2 million (13.7%) in FY 2016, while ATB revenue was up by $14.1 million (91%). The overall effect was an 11.9% decrease in silver revenue for the year.
Platinum Bullion—According to the annual report, the Mint was able to resume production of platinum bullion in FY 2016 because it finally found a supplier of platinum that could meet the Mint’s delivery requirements. (Prior to 2016, the Mint had not produced an American Eagle Platinum coin since the spring of FY 2014.) The resulting APE coins sold out entirely, with more than 17,000 units being sold within the first 24 hours of their release. The 20,000 ounces of platinum bullion sold generated $22.6 million in revenue, but a net loss of $1.1 million.
The Mint’s best-selling product in FY 2016 was the annual Proof Set (390,000 units), followed by the 2016 ASE Proof coin (346,000), 2016 Silver Proof Set (267,000), 2015 Proof Set (209,000), and 2016 Uncirculated Set (204,000). Total product sales for the year were 4.2 million units, which represented a significant drop from the 5.4 million units sold in FY 2015. Numismatic revenue for FY 2016 was $413 million; this was a $40.2 million (8.9%) drop from the previous year.
A particular culprit was the 54.3% drop in silver coin product sales, which added up to a $45.3 million decrease in revenue from silver coin products. A new legislative requirement to add 30th-anniversary edge lettering to ASE coins delayed their release, and the effect of the reduced sales was marked: The ASE Proof contributed $25.8 million to the Mint’s revenue in FY 2016—a $10.7 million (29.3%) drop from FY 2015.
Gold and platinum numismatic sales generated 56.7% of revenue last year—that is, $233.7 million, compared to $179.3 million from the other numismatic categories.
In FY 2016, the Mint rolled out two commemorative programs. The National Park Service 100th Anniversary program had revenue of $13.6 million, yielding surcharges of $1.9 million through September 30. The Mark Twain program had revenue of $11.1 million, resulting in surcharges of $1.6 million through September 30. The surcharges support (respectively) the National Park Foundation and four institutions that honor and preserve the legacy of American author Mark Twain.