Mint Ends Penny Production as Costs Soar

Mint Ends Penny Production as Costs Soar \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ The U.S. Mint is ending penny production, as each 1-cent coin now costs nearly four cents to make. President Trump called for the phaseout due to inefficiencies, and the Mint has placed its final order for penny blanks. Rising metal and labor costs have affected all coin denominations.

Quick Looks

• Penny Production Ends: Final order of penny blanks issued.
• Trump-Backed Move: President calls for penny phaseout to cut waste.
• Penny Cost: Now costs $0.0369 to make each 1-cent coin.
• Other Coins Affected: Nickel and quarter also cost more than face value.
• Mint Cuts Output: Coin circulation down 44% overall in FY2024.
• Nickel Costs Nearly 14 Cents: Outpaces its 5-cent value nearly 3x.
• Paper Money Cheaper: $1 and $2 bills cost just 3.2 cents to print.
• Public Demand Drives Output: Mint adjusts coin production seasonally.

Deep Look

The United States Mint is officially winding down production of the penny, marking the end of an era for the copper-colored coin that’s long outlived its economic usefulness. The final decision follows President Donald Trump’s directive earlier this year to phase out the coin, citing inefficiencies in its production and distribution.

The penny’s fate was sealed this week when the U.S. Mint confirmed it had placed its final order for penny blanks—the copper-plated zinc discs used to strike the coin. Once those blanks are used up, the Mint will cease minting new one-cent coins, effectively retiring the denomination.

The Penny Problem: Four Cents to Make One

The penny has become a money-loser for the federal government. According to the Mint’s most recent annual report, each penny now costs $0.0369 (nearly four cents) to produce and distribute. That’s a 20% increase over the previous year, when unit costs were just over three cents.

In FY2024, the Mint produced 3.17 billion pennies, down significantly from the 4.14 billion it shipped the year before. The drop reflects both lower public demand and a shift in the Mint’s production strategy, which fluctuates based on seasonal and transactional trends.

The penny’s high production cost is largely attributed to metal prices, labor, and logistics—all of which have risen in recent years. These factors have reignited public debate over whether a coin with virtually no purchasing power still deserves to exist.

Nickel Costs Nearly Triple Its Value

The penny isn’t alone in being a cost-inefficient coin. The U.S. nickel now costs $0.1378 to make—nearly three times its face value. This marks the 19th consecutive year that the nickel’s production cost has exceeded five cents.

Nickel production in FY2024 fell dramatically to 202 million coins, compared to over 1.4 billion shipped the previous year. The decline suggests the Mint may be reconsidering how it prioritizes denominations based on unit cost vs. utility.

Other Coins: Still Costly, But Less So

• Dime: Each 10-cent coin now costs $0.0576 to produce—over half its face value.
• Quarter: Cost per coin is $0.1468, which is more than half of its 25-cent value.
• Half-Dollar: Comes in at $0.3397 per coin, or 68% of its 50-cent value—a jump of over 30% from FY2023.

These costs reflect a broader trend: coin manufacturing is becoming increasingly expensive in a digital economy where cash transactions are declining.

Even with reduced demand, the Mint still shipped millions to billions of these coins in FY2024, albeit at lower volumes than previous years.

Paper Currency: Still the Budget-Friendly Option

While coins continue to bleed cash, paper money remains relatively economical. According to the Federal Reserve, the production cost for most banknotes is far less than their face value:

• $1 and $2 bills: 3.2 cents each
• $5 bills: 5.3 cents
• $10 bills: 5.5 cents
• $20 bills: 6 cents
• $50 bills: 5.6 cents
• $100 bills: 9.4 cents

Given their low production costs and durability, paper notes remain a more cost-effective option, especially in an era of reduced cash use and rising mobile payments.

Why the Penny Is Being Phased Out Now

The penny has long been targeted by fiscal conservatives, economists, and even retail groups advocating for rounding transactions to the nearest nickel. But political inertia and public sentiment kept it alive.

That changed with Trump’s push for governmental efficiency in currency production. By backing the penny’s removal, Trump aligned with decades of budget analysts who have argued that the coin’s cost outweighs its benefits.

Critics of the decision note that removing the penny may introduce minor pricing shifts in consumer goods, but supporters argue that most digital transactions are already rounded automatically, making the coin obsolete in modern commerce.

What’s Next for Coinage?

With the penny’s end imminent, other coins could follow, especially the nickel, which remains deeply unprofitable to produce. Treasury and Mint officials have not confirmed any additional phaseouts, but cost reports suggest broader coinage reform could be on the horizon.

In the meantime, consumers can expect to see fewer pennies in circulation and, possibly, more retailers rounding prices—a move already adopted in countries like Canada, Australia, and New Zealand, all of which eliminated their lowest-value coins years ago.

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