The financial losses due to retained placenta in Dutch dairy cattle were estimated by using two different methods of calculation. A data-set containing the birth records of 160,188 Meuse-Rhine-Yssel cows provided data on the reproductive performance of cows with and without retained placenta. The fertility of cows after retention of the placenta appeared to be affected. An economic calculation made by adding the losses due to increased calving interval, increased culling rate, loss of milk production and the costs of veterinary treatment and drugs revealed that the total loss due to retained placenta was 471 pounds per year for a 100-cow farm with an average incidence of the condition (6.6 per cent). For a 'problem' farm with a 30 per cent rate, the loss was 2139 pounds per year. A computer farm simulation model, based on a stochastic determination of events, was used to make calculations for circumstances closely resembling those on farms. A 6.6 per cent rate of retained placenta caused a small but significant decrease in net return on labour and management; however, a 30 per cent rate caused highly significant changes. The economic effects of retained placenta were similar in magnitude in herds of high or low productivity and high or low fertility. Sensitivity analysis showed that the greatest financial losses were caused by loss of milk production, followed by the number of animals suffering from complications. The financial losses in herds with an average rate of retained placenta were thus of limited economic importance and therapeutic measures alone should be adequate.