How much does it cost to make a penny, and are we 'losing' money on other coins?

(NEXSTAR) — In a move potentially foretold by the Department of Government Efficiency (DOGE), it seems the U.S. could be on the verge of ending penny production.

President Donald Trump on Sunday said that he had asked the Treasury Department to stop minting new pennies, calling them “wasteful.” 

“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies. Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” Trump wrote on Truth Social.

But is the penny really wasteful? Here’s what to know.

How much does a penny cost?

Technically, Trump underreported how much the U.S. spends to mint a single penny. 

The average cost to make one penny rose to 3.69 cents in the last fiscal year, marking the 19th consecutive year the coin has "remained above face value,” per the latest U.S. Mint report. The increased price could be attributed to the 5.4 percent increase in copper price per tonne noted by the Mint — pennies are mostly zinc but with a copper plating. (Zinc prices dropped nearly 5 percent between fiscal year 2023 and fiscal year 2024, according to the Mint report.)

There have been efforts to make the penny cheaper to produce. Ed Moy, 38th director of the U.S. Mint, explained during a 2022 conversation that even using a cheaper metal, like steel, would be ineffective. Plastics and polymers would also prove difficult, especially when put into coin-counting machines that look for metals.

Are we “losing money” on other coins?

According to the U.S. Mint, producing nickels has also remained above face-value for nearly 20 years. In fiscal year 2024, it cost nearly 14 cents to make the five-cent piece.

Across the other coins — the dime, quarter, and half-dollar — the situation is much better. 

Per the latest U.S. Mint report, it costs less than six cents to make a dime ($0.0576). To make a quarter, it cost about 15 cents ($0.1468), and nearly 34 cents for a half-dollar ($0.3397).

These prices are up over previous years, however. Since 2022, the costs of producing a single dime, quarter, and half-dollar has increased by $0.0073, $0.0357, and $0.1682, respectively. 

Penny costs have increased by $0.0097 since 2022, while nickel costs have increased by $0.0337.

Why do we still have the penny, then?

There are a number of reasons, experts say.

There’s the practicality of the one-cent piece. While you're likely using cash less, when you do, you expect to receive the exact change you are owed. Without pennies, it would be difficult to, say, give you change on a $19.87 purchase if you pay with a $20.

It could also impact those who do not use credit or debit cards and instead rely on cash and coins. In its 2023 survey, the Federal Deposit Insurance Corporation (FDIC) found that roughly 4 percent of households — or about 5.6 million households — were unbanked. That means they did not have a checking or savings account with a bank or credit union, which could indicate their reliance on cash and coins, like the penny.

It's also difficult to make changes to our money.

Under the Constitution, Congress is responsible for regulating the Federal Reserve and overseeing our money. Moy noted in 2022 that it's "hard to get things through Congress." He said it's partially because the Mint brings in money.

"Even though you're losing $80 million a year on one single product line, $80 million is a pittance compared to a $4 trillion budget," he explained, adding that while money is lost on the penny, there's profit in the quarter and dollar coin which "more than outweigh whatever losses our coins are."

While speaking with Moy, Philip Diehl, the 35th director of the U.S. Mint, noted there is also interest from lobbyists representing those who manufacture the zinc used to make pennies, for example.

Congress has tried to tackle the penny problem in recent years. In 2020, bipartisan bills were introduced in the House and Senate that would have given the Mint the power to "alter the composition of circulating coins to reduce the cost of manufacturing them," the Federal Reserve Bank of Richmond explains. Both bills failed to pass. Similar bills were introduced in 2023, though they met the same fate.

There could also be consequences of the penny no longer being minted. 

In a 2022 report from the Federal Reserve, officials warned that "drastically reducing or ending the production of the penny" could lead to a "significant flowback of coin from consumers and businesses seeking to turn in their pennies."

The same report suggested, however, that reducing penny production could save the Mint up to $100 million annually.

It is unclear whether Trump has the power to unilaterally eliminate the lowly one-cent coin. Currency specifications, including the size and metal content of coins, are dictated by Congress.

But Robert K. Triest, an economics professor at Northeastern University, has argued that there might be wiggle room.

“The process of discontinuing the penny in the U.S. is a little unclear. It would likely require an act of Congress, but the Secretary of the Treasury might be able to simply stop the minting of new pennies,” he said last month.

The Associated Press contributed to this report.