About those pennies... (updated) (again)

Pennies are in the news today because Donald Trump has ordered that their production be terminated immediately.  That's fine, and is something I have advocated back in 2011 and predicted would happen "soon" back in 2012, when Canada eliminated their pennies.

Just to clarify the details regarding the cost and savings:

"Mint operations are funded through the Mint Public Enterprise Fund (PEF), 31 U.S.C. § 5136. The Mint generates revenue through the sale of circulating coins to the Federal Reserve Banks (FRB), numismatic products to the public, and bullion coins to authorized purchasers. All circulating and numismatic operating expenses, along with capital investments incurred for the Mint’s operations and programs, are paid out of the PEF. By law, all funds in the PEF are available without fiscal year limitation. Revenues determined to be in excess of the amount required by the PEF are transferred to the United States Treasury General Fund."

The mint makes money (both literally and figuratively).  Any current losses from producing pennies are overshadowed by profits from paper dollars, commemorative coins, proof sets, etc.

The embedded image is of a penny on the planet Mars.

Reposted to add some new information from Bloomberg:

Portland Mint, sells old pennies in bulk — 40,000 pounds (18,100 kilograms) at a time — to investors angling to profit on the copper that makes up 95% of the coins minted before 1983. A cache of one-cent pieces from Portland Mint with a face value of roughly $60,000 sells for about $120,000.

The wager is that those older pennies contain copper that would be worth about $180,000 at current prices. One snag: It’s illegal to melt a mass of Lincoln cents to harvest the metal. But penny hoarders gained fresh hope that their bets will one day pay off when President Donald Trump said this week that he ordered the Treasury secretary to stop minting the coins...

“Collectors and investors speculate the value of copper will go up,” said Ted Ancher, director of numismatics at Apmex, a precious metals dealer in Oklahoma City that has been selling copper pennies for years. “That is the primary reason they buy copper cents.”

Customers favor “the ’82 and earlier stuff,” said Dennis Steinmetz, founder of Steinmetz Coins & Currency in Lancaster, Pennsylvania. The company offers 5,000 pennies – with a $50 face value – for $79.

“As you may know you may not currently melt these,” Steinmetz’s website says. “However if the government authorizes melting you will be way ahead.”

Reposted from earlier this year to add some excerpts from a sometimes-humorous article in The Atlantic:

What is the United States going to do with all the pennies—all the pennies in take-a-penny-leave-a-penny trays, and cash registers, and couch cushions, and the coin purses of children, and Big Gulp cups full of pennies; all the pennies that are just lying around wherever—following the abrupt announcement that the country is no longer in the penny game and will stop minting them, effective immediately?

The answer appears to be nothing at all. There is no plan...

It is my miserable fate to possess more miscellaneous information about U.S. one-cent coins than, possibly, any other person on this planet. This is not a boast. The information I command is data no one without a neurodevelopmental disorder would ever yearn to know; it is a body of knowledge with no practical use for anyone. I contracted this condition last year, as I spent several months attempting to ascertain why, in the year 2024, one out of every two coins minted in the United States was a one-cent piece, even though virtually no one-cent pieces were ever spent in the nationwide conduction of commerce, and, on top of that, each cost more than three cents apiece to manufacture...

Another thing I learned daily over the course of my reporting: No one cares about pennies... There were logical reasons not to care: 300 billion pennies—all of them still and indefinitely legal currency—constitute approximately zero percent of the total money supply of the United States (0.0 percent if rounding to one decimal place). The millions of dollars the government loses by paying more than three cents to manufacture one-cent coins represents an infinitesimal fraction of 1 percent of the government’s several-trillion-dollar budget...

Most pennies produced by the U.S. Mint are given out as change but never spent; this creates an incessant demand for new pennies to replace them, so that cash transactions that necessitate pennies (i.e., any concluding with a sum whose final digit is 1, 2, 3, 4, 6, 7, 8 or 9) can be settled. Because these replacement pennies will themselves not be spent, they will need to be replaced with new pennies that will also not be spent, and so will have to be replaced with new pennies that will not be spent, which will have to be replaced by new pennies (that will not be spent, and so will have to be replaced). In other words, we keep minting pennies because no one uses the pennies we mint.

Effectively, they are trash—trash that Americans pay the government (via taxes) to manufacture, at a loss, and then foist back on us..

Then I realized they weren’t going to do anything about the vaults, because there was no plan at all to do anything except stop making pennies... This isn’t how it usually works when a smoothly running country elects to retire some portion of its currency... To date, the Canadian Mint has recycled more than 15,000 tons of pennies, redeemed by the public for their face value. Recycling the metal from Canadian pennies (mainly copper and steel) helped offset the cost of trucking billions of unwanted pennies across the nation. And, of course, it kept the coins out of landfills...

But it’s unclear if anyone would bother recycling U.S. pennies, which, although copper-plated, are made mostly of zinc. Recycled zinc is worth only about a quarter of recycled copper; nearly 1 million tons of copper are recycled in the U.S. each year, versus only about 165,000 tons of zinc. On top of this, a Canadian Mint official told me, copper and zinc are “very hard” to separate.

Personally I hadn't realized the impracticality or impossibility of recycling a copper/zinc mixture.  But the older copper pennies will still have "melt value" (assuming it's now legal to melt them).