When Are They Going to Stop Making Pennies?

Despite its small value, the one-cent coin has been a consistent subject of discussion regarding its relevance and continued production. This ongoing debate touches upon economic realities, practical considerations, and public sentiment, shaping perceptions of this long-standing unit of currency. Understanding the various facets of this conversation provides insight into the penny’s evolving role in the economy.

Current Status of Penny Production

The U.S. Mint, a bureau of the Department of the Treasury, produces U.S. coinage. In 2024, the Mint produced 3.2 billion pennies, accounting for 39.7% of all coins produced that year. The Federal Reserve consistently orders pennies, often more than any other denomination, to meet demand from financial institutions.

The U.S. Treasury Department announced in May 2025 that it would halt penny production starting in 2026. The Mint has placed its final order for penny blanks, and production will cease once these are used, likely by early 2026. While new production will stop, the penny will remain legal tender and continue to circulate.

Factors Influencing Penny Production

A primary consideration in the debate surrounding the penny is its production cost. As of 2024, it cost 3.69 cents to mint and distribute a single penny, which is significantly more than its face value. This has resulted in the U.S. government losing money on each penny produced, with annual losses estimated around $110 million in 2024 and $179 million in 2023. This negative seigniorage, where the cost of production exceeds the coin’s value, has been a consistent issue for 19 consecutive fiscal years.

The penny’s diminishing purchasing power also fuels discussions about its utility. Due to inflation, the value of a penny has eroded significantly over time; a penny in 1909, for instance, could buy items like a loaf of bread or a cup of coffee, which now cost approximately 100 times more. Many people view pennies as having little transactional value, often collecting them in jars or discarding them rather than spending them.

Practical inconveniences associated with handling low-value coins also contribute to the discussion. Managing pennies adds time to cash transactions for both consumers and businesses. Research suggests that eliminating pennies could save retailers several seconds per transaction. Public sentiment also plays a role, with pricing strategies often ending in .99 cents, which historically necessitated the penny for exact change.

Historical Context of Penny Debates

Discussions about the penny’s utility and potential discontinuation are not a recent phenomenon. Debates within the United States government and society about eliminating the one-cent coin have existed for decades. Various legislative efforts have been made to cease penny production, including bills introduced by U.S. Representatives in the early 1990s and 2000s, though none were approved. The U.S. also discontinued the half-cent coin in 1857 due to its low purchasing power, which had a buying power equivalent to about 17 cents in 2024 dollars.

Many other countries have already addressed similar issues by phasing out their lowest-denomination coins. Canada, for example, ceased production of its penny in May 2012, with distribution stopping in February 2013. The decision was driven by rising production costs, as it cost 1.6 cents to produce each Canadian penny, and the coin’s declining purchasing power. Australia removed its 1- and 2-cent coins in 1992, and New Zealand eliminated its 1- and 2-cent coins in 1990, later discontinuing the 5-cent coin in 2006. Some Eurozone countries, such as Finland, Ireland, and the Netherlands, have also stopped issuing 1- and 2-cent euro coins, opting for rounding rules in cash transactions.

Outlook for the Penny

Significant hurdles remain for a complete and immediate discontinuation of the penny. Public opinion has historically shown mixed views, though recent surveys indicate more support for elimination, especially when people are informed about production costs. Lobbying efforts, particularly from industries that benefit from penny production, have also played a role in maintaining its circulation. The potential impact on cash transactions, especially for low-income households who rely more on cash, is a concern, as is the effect on charitable donations that often collect small change. Any widespread change would require legislative action from Congress, which has the authority to formally eliminate forms of U.S. currency.