A few weeks ago, I saw a post on X from Ryan Petersen, CEO of Flexport, asking Elon Musk and DOGE to assess if the San Francisco Mint should be occupying such valuable real estate, seeing as they only seem to make “special commemorative coins for collectors”. Petersen then shared a photo of a US Mint product, the 2022 American Women Quarter featuring Nina Otero-Warren, along with a comment: ‘This special commemorative quarter produced by the San Francisco Mint says “I vote for the woman” in Spanish.’
While the text was simple, the subtext was more significant: Why is the U.S. Mint using prime San Francisco real estate to produce collector coins featuring relatively obscure historical figures? San Francisco is a known for being home to some of the most innovative companies and entrepreneurs in the world, yet there is a government building right along-side them producing coins for a niche audience.
This got me curious: What’s driving the U.S. Mint’s product choices? Are these coins profitable, and is the Mint operating efficiently? I decided to take a deeper dive into the economics and efficiency of the U.S. Mint to find the answers to these questions.
Overview of the U.S. Mint
The U.S. Mint operates six facilities, each serving a distinct purpose. Four of these are production branches located in San Francisco, Denver, Philadelphia, and West Point, where coins and medals are manufactured. Another is Fort Knox, dedicated to safeguarding the nation’s gold reserves, while the Mint’s administrative operations are housed in Washington, D.C. The Mint’s operations can be categorized into four main units: securing gold reserves at Fort Knox, producing circulating coinage for everyday commerce, and minting bullion and numismatic coins for investors and collectors.
The Mint’s mission is to “enable America’s economic growth and stability by protecting assets entrusted to us and manufacturing coins and medals to facilitate national commerce.” In line with this objective to enable America’s economic growth, the U.S. Mint transfers any excess funds from its operations to the Treasury General Fund (TGF), which helps fund critical government expenses such as salaries, Social Security, defense, and infrastructure. As shown in the chart below, the Mint has contributed an average of $270 million per year to the TGF since 2016—a substantial contribution. This underscores the importance of ensuring the Mint operates efficiently and profitably, as increased transfers to the TGF ultimately benefit the American public.
If we first look at the business of safeguarding the U.S. gold reserves at Fort Knox, we see this is strictly a cost center. The U.S. Mint does not lease, hedge, or otherwise monetize its gold reserves, meaning that securing the gold at Fort Knox does not generate any revenue, and incurs costs in safeguarding the gold. The gold reserves are valued at $42.22 per ounce for accounting purposes, so fluctuations in the gold spot price do not affect the Mint’s financial performance. Security costs to protect these gold reserves, along with other Mint operations and properties, totaled $54.4 million in 2024.
In contrast, the production of circulating, bullion, and numismatic coins generates revenue and can be profitable. In FY 2024, the Mint’s net income from these three segments totaled $182.4 million, with circulating coinage contributing $99.5 million, numismatic products $42 million, and bullion $40.9 million.
After accounting for security costs, the net income from the Mint’s overall operations was $128 million. This amount was deemed excess of what is necessary to continue the Mint’s operations, so the Mint transferred $50 million to the Treasury General Fund in 2024. While this was a substantial transfer, it was 80% less than the nine-year average transfer of $270M.
I was pleasantly surprised to discover that the U.S. Mint was quite profitable last year (and even more so in previous years!), but the questions still lingered: Is the Mint operating efficiently, and what drives its product choices?
Circulating Coinage: The Largest Profit Center
If we look at the most profitable unit of the Mint’s operations first, it’s a mixed bag of inefficiencies and staggering profitability. The Mint’s circulating coinage program consistently generates an outsized portion of the net income each year. It creates coins to meet public demand and sells them to banks at face value, with the difference between face value and production costs known as seigniorage – this is the Mint’s gross profit for circulating coinage.
As President Trump recently highlighted, the Mint loses money producing pennies (nickels are also more expensive to produce than they’re worth). The penny costs about 3.7 cents to produce, while the nickel costs 13.8 cents, resulting in millions in losses annually. The dime, quarter and half dollar are all profitable and offset the penny and nickel losses. President Trump’s suggestion to eliminate the penny is worth considering, as other countries (e.g., Canada, Australia) have successfully phased out low-denomination coins with minimal economic disruption. Wouldn’t it make sense to also eliminate the nickel? The potential savings could be even greater, and the economic consequences might be immaterial—perhaps only requiring updates to coin-operated machines, laundromats, and parking meters.
The total production of circulating coinage last year was abnormally small; in fact, 2024 experienced a 44% decline from 2023 and matched the 2008-2009 years of the Great Financial Crisis as the lowest number of circulating coins produced since 1975. Given the low demand, there’s likely extra capacity to create more coinage if necessary.
Other Mints, such as the Royal Canadian Mint, regularly produce coins for other countries and sell them under contract. While meeting domestic coinage needs should remain the primary focus, exploring whether the U.S. Mint could compete for foreign contracts might be a viable strategy to enhance profitability. The Mint could potentially leverage its facilities and scale to diversify its revenue streams.
The Financial Contributions of the San Francisco Mint
To truly assess the Mint’s efficiency and specifically answer Petersen’s question examining the San Francisco Mint (S Mint), I would need deeper insights than what’s publicly available, such as employee productivity metrics and a detailed cost structure (enter DOGE). However, even by looking at publicly available data about the S Mint, which exclusively produces numismatic coinage, primarily silver proof coins, we can gain some valuable insights.
The S Mint contributes to several numismatic product categories, including Silver Coin Products, Annual Core Sets, Quarter Products, and Commemorative Coins. To remain conservative, I’ll exclude Miscellaneous Products, as the S Mint’s involvement there is unclear. I do not have access to specific product margins, so I’ll assume each category’s products have a similar margin. When analyzing the S Mint’s contribution to overall profitability, I found the following:
Summing these estimates, the S Mint’s net contribution to the Mint’s profitability might be $6.5M - $8.5M, representing less than 7% of the Mint’s overall $128M net income. What’s more, since the West Point Mint also produces Proof Silver Eagles, the S Mint’s most profitable products are not unique to this facility. This implies that the machinery, know-how and scale (W Mint typically produces more Proof Silver Eagles each year than S Mint) to produce proof silver coinage already exists at other facilities, and the other coins produced there do not contribute materially, or negatively contribute to the Mint’s overall profitability. If that’s the case, is the S Mint truly essential? If so, does it have to still operate in its existing location or would it make sense to look at alternative locations?
The Decline of Traditional Programs
The losses associated with the production of Annual Core Sets raises an important question: Are these products a loss leader designed to attract customers who might then purchase higher margin items, or is the Mint simply continuing an 85-year tradition without a strong market demand?
A look at historical sales of proof sets by decade, shown below, indicate that demand peaked in the 1970s and has since fallen to 1950s levels, despite the U.S. population nearly doubling during that time. While the Mint may have internal data showing that Annual Sets drive sales of higher-margin products, it’s worth questioning whether the Mint’s product strategy is driven more by tradition than market demand.
Source: A Guide Book of United States Coins by R.S. Yeoman
The Mint does not impose mintage or product limits on the Silver Proof Set or the Proof Set, which sold 445,000 units combined. This suggests the Mint is not artificially constraining demand. However, it does set mintage limits on other sets, such as the uncirculated set (73% of the product limit sold) and the Limited Silver Proof Sets (50,000 limit).
With the Annual Sets category losing money each of the last 10 years, with the average loss $15.5M each year, this begs the question: Why not contain losses in the Annual Set category by imposing similar limits on the Proof and Silver Proof Sets? If these products consistently lose money, wouldn’t it make sense to either raise the price or limit the quantity sold?
The Mint explicitly states that part of its objective with numismatic offerings is to “control costs and keep prices as low as possible.” However, this mission doesn’t necessarily mean selling products at a loss. Adjusting the pricing strategy to at least break-even could help achieve financial sustainability while still aligning with the objective of affordability.
If we examine another segment of the Mint’s numismatic products—commemorative coins—we see a trend similar to what we observed with the Annual Sets. The Mint creates commemorative coins to “celebrate and honor American people, places, events, and institutions,” but the sales data for uncirculated silver dollars and proof gold $5 modern commemorative coins suggests that interest in this segment is waning.
Over the past 30 years, demand for silver uncirculated $1 commemorative coins has fallen by 85%, and gold $5 proof commemorative coins by almost 97%.
Source: A Guide Book of United States Coins by R.S. Yeoman
Source: A Guide Book of United States Coins by R.S. Yeoman
While some themes have bucked the trend—such as the 2019 Apollo 11 50th anniversary and 2014 Baseball Hall of Fame coins, each selling over 32,000 units—the broader trend suggests either the Mint’s customer base is shrinking, the chosen themes are not resonating, or perhaps both.
Sales data from the 2024 commemorative programs indicates these programs may be missing the mark. The Harriet Tubman Proof $5 gold coin sold only 5,667 units, and the uncirculated version sold 5,321 units—both achieving just 10-11% of their 50,000 mintage limit. The silver proof dollar for the same series had a 400,000 limit, yet only 24,160 coins sold (6%). It's worth noting the Commemorative program generated a net income of $2.4M last year; however, given the waning popularity, there appears to be room for improvement.
This raises a critical question: How does the Mint decide which themes to produce each year? Some coin programs are set by statute or individual laws, while some are chosen with the Mint’s discretion. For example, in the two examples of provided earlier - the Proof Sets are produced at the Mint’s discretion, while the commemorative coins were mandated by Congress through specific legislation.
Petersen’s second point about the S Mint producing products for a niche audience is worth considering. The stated objective of the Mint’s numismatic program is to “increase the Mint’s customer base and foster sales while controlling costs and keeping prices as low as possible.” However, when commemorative coins honor historical figures who may not be targeted to the general collector audience at large, it raises questions about how these choices align with the Mint’s goals.
The American Women’s Quarter program, established by the 2020 Circulating Collectible Coin Redesign Act, is a prime example. The Mint had no discretion over this program, which generated a net loss of $3.7M in 2024, demonstrating how its objectives can be subverted by laws influenced by political agendas. Given the Mint’s profitability directly impacts taxpayers, perhaps it’s worth investigating how and why certain programs are legislated.
If the goal is to attract new customers and boost sales, the Mint—and lawmakers—should consider how commemorative coin themes are chosen. Aligning themes more closely with collector interest, rather than political agendas, could revitalize sales and strengthen the Mint’s financial position as well as expand the collector base.
Successes and Efforts and Enact Change
While there are certainly areas where the U.S. Mint could improve, there are also notable successes worth highlighting. The U.S. Mint’s bullion program, featuring the American Eagle, is consistently the top-performing bullion program worldwide. In 2024, this segment alone generated over $40 million in net income, underscoring its significance to the Mint’s overall profitability.
Since their introduction in 1986, Gold and Silver American Eagles have been best-sellers, maintaining their iconic designs until 2021, when the Mint introduced new reverse designs. This proactive move helped refresh the series and reinvigorate demand, while also adding enhanced security features to combat counterfeiting. The updated designs were well-received by investors and collectors alike, demonstrating the Mint’s ability to balance tradition with innovation.
Gold and Silver Eagle bullion coins struck in 2024, featuring the new reverse designs introduced in 2021.
Notably, American Eagles are the most expensive annually recurring gold and silver bullion products on the market. The fact that the Mint has managed to capture higher margins without sacrificing demand speaks to the strength of its brand. Investors continue to pay a premium for U.S. Mint bullion products, contributing to its financial stability.
In 2024, the U.S. Mint took significant steps to reinvigorate its product line, demonstrating a renewed focus on market trends and collector interest. Collaborating with the Royal Mint, the Mint introduced the Liberty and Britannia gold coin and silver medal, combining the icons of the two nations in a single offering. While the gold coin didn’t sell out, it was an effort to revitalize a product catalogue, which I applaud.
The Mint also honored its heritage by re-creating popular historic designs, such as the Morgan and Peace dollars, and celebrating the 230th anniversary of the Flowing Hair Gold High Relief 1-ounce coin. The Flowing Hair design, a favorite among collectors, proved its appeal by selling out its 10,000-coin product limit.
The Morgan and Peace programs, which began in 2021 to commemorate the 100th anniversary of these coins, started strong with robust sales. Seeing the initial success, the Mint decided to continue production in 2023 and 2024, transforming what began as a commemorative series into a potential product staple. While the 2023 coins sold better than those struck in 2024, this may be attributed to a stronger market rather than diminishing interest. By maintaining this program, the Mint is effectively testing market demand, showing a willingness to experiment and adapt its product strategy.
Looking forward to 2025, the Mint is partnering with Warner Bros to honor comic book art as a uniquely American art form, launching a three-year series featuring Super Hero designs. This initiative, based on customer input, aims to engage a younger audience and expand the Mint’s collector base, aligning with the Mint’s goals.
Additionally, in 2026, the Mint will commemorate the country’s 250th birthday with the “Best of the Mint” series, reviving circulating coin designs in a collection that reflects public demand. This customer-centric approach should help de-risk the program and ensure it sells well.
As the data suggests, not all products resonate with collectors, and politically mandated programs may sometimes diverge from the U.S. Mint’s objectives of expanding its customer base and boosting sales. It may be time to re-examine the role of government officials in determining which products and themes the Mint must produce. While the Mint has made strides in listening to the community and creating products that align with collector interests, continued progress in this direction could strengthen sales and help grow the audience for U.S. Mint coins and collectibles.
Disclaimer: The insights and analyses presented in this article are based on my best interpretations of publicly available data from the U.S. Mint’s Annual Reports and the U.S. Mint website. While I strive for accuracy, there is a possibility of misinterpretation or incomplete understanding of the data. Any sources not specifically cited are from the US Mint website or Annual Reports. This article was edited using AI tools for conciseness, all economic insights and analysis are original.