The Cost to Make a Penny: For nearly two decades, the cost to make a penny has exceeded its actual value, leading to concerns about government spending and coin production efficiency. In 2024, the U.S. Mint reported that producing a single penny costs 3.69 cents, a significant increase from previous years. Similarly, nickels now cost 13.78 cents to manufacture, making both coins financially impractical.
With rising metal prices, reduced coin circulation, and increased production costs, the financial strain on the U.S. Mint has reached a tipping point. This has prompted serious discussions about whether the penny should be eliminated altogether. In February 2024, President Trump ordered a halt to penny production, calling it a “wasteful” expense. This article explores the reasons behind the increasing cost to make a penny, the impact on U.S. coinage, and what the future may hold for the one-cent coin.
The Rising Cost of Coin Production
How Much Does It Cost to Make a Penny?
Over the years, the cost of producing a penny has steadily increased due to various factors, including raw material prices, manufacturing expenses, and reduced coin circulation. Here’s a breakdown of how much it costs to produce different U.S. coins in 2024 compared to 2023:
| Coin | Production Cost (2024) | Production Cost (2023) | Increase (%) |
| Penny (1¢) | 3.69 cents | 3.07 cents | 20.2% |
| Nickel (5¢) | 13.78 cents | 11.54 cents | 19.4% |
| Dime (10¢) | 5.76 cents | 5.30 cents | 8.7% |
| Quarter (25¢) | 14.68 cents | 11.63 cents | 26.2% |
| Half Dollar (50¢) | 33.97 cents | 25.98 cents | 23.5% |
Why Is the Cost to Make a Penny So High?
Several factors have contributed to the rising cost of producing pennies and other low-value coins:
- Increased Metal Prices: The penny is made of 97.5% zinc and 2.5% copper. While zinc prices slightly decreased in 2024, copper prices rose by 5.4%, pushing production costs higher.
- Lower Production Volumes: The total number of coins produced by the U.S. Mint declined by 44.1% in 2024. With fewer coins being made, fixed costs per unit have increased.
- Manufacturing and Distribution Costs: Costs associated with transporting, storing, and handling pennies have also risen, adding to the overall expense.
Financial Losses: Seigniorage and the U.S. Mint
Seigniorage refers to the profit made when a coin’s face value exceeds its production cost. However, pennies and nickels operate at a loss, draining government resources.
How Much Money Is the U.S. Mint Losing?
- In 2024, the U.S. Mint lost $85.3 million from penny production alone.
- Nickel production resulted in an additional $17.7 million in losses.
- Total seigniorage revenue dropped 60% from 2023, totaling just $99.5 million.
This decline raises concerns about the financial sustainability of producing pennies and nickels. While dimes, quarters, and half dollars remain profitable, the losses from pennies and nickels have sparked debates about whether they should continue to be minted.
Trump’s Executive Order: Ending Penny Production
In a surprising move, President Trump announced an official halt to penny production on February 9, 2024. In a Truth Social post, he criticized the coin’s high production costs and called for its elimination to reduce government waste.
What Was Trump’s Reasoning?
✅ Pennies cost too much to produce, making them inefficient for government spending.
✅ Other countries, such as Canada, have already eliminated pennies without economic issues.
✅ Digital transactions have reduced the need for small coins, making pennies less relevant.
However, some critics argue that eliminating the penny could cause businesses to round prices up, potentially raising costs for consumers.
The Case for Eliminating the Penny
The debate over whether to eliminate the penny has been ongoing for years. Here are the key arguments on both sides:
Pros of Getting Rid of the Penny:
- Saves Money: Eliminating pennies could save taxpayers millions by reducing production losses.
- More Efficient Transactions: Cash payments would be streamlined by rounding to the nearest five cents.
- Environmentally Friendly: Less metal mining and production would reduce environmental impact.
Cons of Eliminating the Penny:
- Potential Price Rounding Issues: Businesses might round prices up instead of down, costing consumers more.
- Historical and Cultural Significance: The penny has been in circulation for over 150 years and is a part of American heritage.
- Impact on Charities: Many donation programs rely on penny collections for fundraising efforts.
With the cost to make a penny at an all-time high, many experts believe it’s only a matter of time before the U.S. follows Canada and other countries in eliminating the coin.
What About the Nickel? Will It Be Next?
While the debate around pennies is at the forefront, the nickel is also a major financial burden. At 13.78 cents per coin, nickels cost almost three times their face value to produce.
The U.S. Mint has already taken steps to reduce nickel production by 85.7% in 2024, signaling that it may also be phased out in the near future. Possible solutions include:
- Changing the metal composition to a cheaper alternative.
- Gradually reducing circulation, similar to how Canada handled its pennies.
- Eliminating nickels altogether, following the same logic used for pennies.
For now, the future of the nickel remains uncertain, but rising production costs suggest it could be the next coin to disappear.
Final Thoughts: What’s Next for the Penny?
With rising costs, declining seigniorage revenue, and Trump’s executive order, the cost to make a penny has become unsustainable. While the penny has been a staple of American currency for centuries, its financial burden may outweigh its usefulness.
Will the U.S. fully eliminate the penny? Will the nickel follow? These decisions could reshape the way Americans use physical currency in the future.
