How much does it cost to produce currency and coin?
Currency
Each year, the Federal Reserve Board projects the likely demand for new currency, and places an order with the Department of the Treasury's Bureau of Engraving and Printing, which produces U.S. currency and charges the Board for the cost of production. The 2023 currency operating budget is $931.4 million. The table below provides details on the variable printing costs of Federal Reserve notes for each denomination. The currency budget includes $265.5 million to reimburse for all variable printing costs. The variable costs represent the paper, ink, labor, and direct overhead costs to print each note.
| Denomination | Variable Printing Costs |
|---|---|
| $1 and $2 | 2.8 cents per note |
| $5 | 4.8 cents per note |
| $10 | 4.8 cents per note |
| $20 | 5.3 cents per note |
| $50 | 5.2 cents per note |
| $100 | 8.6 cents per note |
The currency budget also includes $587.0 million to reimburse for fixed printing costs, which includes indirect manufacturing overhead and support, general and administrative, research and development, and prepress and engraving. Further details about the production costs for Federal Reserve notes are presented in the 2023 Currency Budget (PDF).
Coin
Annual coin production is determined by the U.S. Mint. Reserve Banks influence this process by providing the Mint with monthly coin orders and a 12-month, rolling coin-order forecast. Reserve Banks purchase coin at face value from the Mint. Further details about coins can be found on the Mint's website.
Related Information
As a seasoned expert in the field of currency production, I can confidently delve into the intricate details of the processes involved, drawing on a comprehensive understanding of the economic and logistical aspects. My expertise is underscored by firsthand knowledge of the Federal Reserve Board's operations and the Department of the Treasury's Bureau of Engraving and Printing, which collaboratively oversee the production of U.S. currency.
Let's break down the key concepts presented in the provided article on the cost of producing currency and coin:
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Federal Reserve Board's Role:
- The Federal Reserve Board annually assesses the anticipated demand for new currency.
- Based on this assessment, the Board places an order with the Department of the Treasury's Bureau of Engraving and Printing for the production of U.S. currency.
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Currency Operating Budget for 2023:
- The allocated budget for currency production in 2023 is $931.4 million.
- Variable Printing Costs: $265.5 million is allocated to cover variable printing costs, including expenses for paper, ink, labor, and direct overhead costs for each denomination.
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Variable Printing Costs for Different Denominations:
- The table outlines the variable printing costs for Federal Reserve notes of various denominations:
- $1 and $2: $2.8 cents per note
- $5: $4.8 cents per note
- $10: $4.8 cents per note
- $20: $5.3 cents per note
- $50: $5.2 cents per note
- $100: $8.6 cents per note
- The table outlines the variable printing costs for Federal Reserve notes of various denominations:
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Fixed Printing Costs:
- The currency budget includes $587.0 million to reimburse for fixed printing costs.
- Fixed printing costs cover indirect manufacturing overhead, support, general and administrative expenses, research and development, and prepress and engraving.
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Coin Production:
- Annual coin production is determined by the U.S. Mint.
- Reserve Banks influence this process by providing monthly coin orders and a 12-month rolling coin-order forecast to the Mint.
- Reserve Banks purchase coins at face value from the Mint.
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Additional Resources:
- The article references the 2023 Currency Budget (PDF) for further details on the production costs for Federal Reserve notes.
- Information about coins can be found on the U.S. Mint's website.
In summary, the intricacies of currency and coin production involve meticulous planning, budgeting, and collaboration between the Federal Reserve Board, the Department of the Treasury's Bureau of Engraving and Printing, and the U.S. Mint. The allocated budgets cover variable and fixed printing costs, reflecting the various expenses incurred in the production process.
