It now costs almost 2 cents to produce a penny. 25 years ago when there was a spike in copper prices, pennies changed to almost all zinc with a copper coating. Now prices of zinc have increased to push the cost of a penny from 1.2 cents to 1.7 cents in just the past year. Since 2003, the price of zinc has increased 450%.
Solutions include using steel or aluminum instead of zinc. There has also been a push to get rid of the penny all together, simply rounding up or down to the nearest nickel. Of course the nickel costs almost 10 cents to make itself.