monsanto 02-21-08

1

CARL CASALEEXECUTIVE VICE PRESIDENT

MORGAN STANLEY GLOBAL BASIC MATERIALS CONFERENCE

FEBRUARY 21, 2008

Forward-Looking Statements

Certain statements contained in this presentation are "forward-looking statements," such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's most recent periodic report to the SEC. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this presentation. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.

TrademarksTrademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation. All other trademarks are the property of their respective owners.

© 2008 Monsanto Company

Non-GAAP Financial Information

This presentation may use the non-GAAP financial measures of “free cash flow,” earnings per share (EPS) on an ongoing basis and Return on Capital (ROC). We define free cash flow as the total of cash flows from operating activities and investing activities. A non-GAAP EPS financial measure, which we refer to as ongoing EPS, excludes certain after-tax items that we do not consider part of ongoing operations, which are identified in the reconciliation. ROC means net income (without the effect of certain items) exclusive of after-tax interest expenses, divided by the average of the beginning year and ending year net capital employed, as defined in the reconciliation. Our presentation of non-GAAP financial measures is intended to supplement investors’ understanding of our operating performance, not replace net income (loss), cash flows, financial position, or comprehensive income (loss), as determined in accordance with GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similar measures used by other companies. The non-GAAP financial measures used in this presentation are reconciled to the most directly comparable financial measures calculated and presented in accordance with GAAP.

FISCAL YEAR:References to year, or to fiscal year, are on a fiscal year basis and refer to the 12-month period ending August 31.

4

OVERVIEW

Brazil exploits land availability advantage to become commodity soy producer to meet demand from China

Expanding ethanol and export

demands favor U.S. as low-cost corn

producer

Argentina leverages

geographic proximity to

supply corn to Latin America

Growing wealth and population in Asia creates new demand for imported grain

STATE OF AGRICULTURE:The New Demand EnvironmentFACTORS:

► INCREASING PROTEIN DEMANDWealth drives meat consumption – changing feed demand

► ASCENSION OF CHINAChina’s growth is reaching limits of domestic production, driving huge changes in export environment

► ESTABLISHMENT OF BIOFUELSAssuming only base-case adoption of biofuels, more corn and soy needed in next decade

Market Forces Are Changing Supply-Demand Patterns Globally, Creating a New Dynamic Across Agriculture

EMERGENCE OF DEMAND-DRIVEN AGRICULTURE: NEW DEMAND AND PRODUCTION TRENDS

5

OVERVIEW

Global Trends Set Stage for Increasing Protein Demand Over the Next Decade

R2 = 0.6687

0

20

40

60

80

100

120

140

160

$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,0002005 GDP PPP ($/Capita)1

2005

Mea

t Con

sum

ptio

n (K

g/C

apita

)2

US

Luxemborg

Norway

Israel

Switzerland

ChileBrazil

China

IndiaSri Lanka

Vietnam

JapanSouth Korea

Mexico

ArgentinaHungary

Saudi Arabia

Russia

CanadaAustralia

UK

France

KuwaitItaly

Turkey

STATE OF AGRICULTURE:Increasing Protein Demand

► Increasing demand for meat creates disproportionate pull on grain

ESTIMATED CONVERSION FACTORS

1LB BEEF: 7-8 LBS GRAIN1LB PORK: 2-3 LBS GRAIN1LB CHICKEN: 1-2 LBS GRAIN

INCREASING PROTEIN DEMAND: RELATIONSHIP BETWEEN GDP AND MEAT CONSUMPTION

1. World Development Indicators Online, The World Bank Group, 2. FAOSTAT | © FAO Statistics Division 2007 | 30 October 2007

First $10K in Per-Capita GDP:• Includes emerging economic powers like China and Brazil• Has largest meat-consumption spread (82 kg/person) of any $10K increment – indicating

opportunity for ascension with small increases in actual income

6

OVERVIEW

China Is Changing the Global Grain Landscape, Emerging as a Major Soybean Importer

STATE OF AGRICULTURE:Emergence of China

China’s 2008 soybean imports would be equivalent to:

CHINA’S GROWING SOYBEAN DEMAND: DOMESTIC PRODUCTION AND IMPORTS1

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2001 2002 2003 2004 2005 2006 2007 2008F 2009F

Production Imports

MIL

LIO

N M

ET

RIC

TO

NS

In 2008, forecasts are for China to import >33MMT of

soybeans

40%Of annual U.S. soy production

60%Of annual Brazil soy production

75%Of annual Argentina soy production

1. ProExporter

OR

OR

7

OVERVIEW

Even at Base Case, Biofuels Still Create New Demand Pull on Corn and Soybean Production

STATE OF AGRICULTURE:Corn for Ethanol

► Recent Renewable Fuels Standard (RFS) increases renewable fuels requirement 30%+ from 2008 to 2012

► By 2008, >30% of U.S. corn will be used for ethanol production

STATE OF AGRICULTURE:Soybeans for Biodiesel

► The Food and Agricultural Policy Research Institute (FAPRI) looked at five cases –applying RFS and tax credits – and forecast as many as 11M acres of U.S. soy needed for biofuels by 2012, or >15% of total

0%5%

10%15%20%25%30%35%40%

2000 2002 2004 2006 2008F 2010F 2012F

U.S. CORN CROP USED FOR ETHANOL:PERCENT OF TOTAL CROP PRODUCTION1

1. ProExporter; 2. Food and Agricultural Policy Research Institute (FAPRI) Estimates

0

2

4

6

8

10

12

2006 2007 2008F 2009F 2010F 2011F 2012F

U.S. SOYBEANS USED FOR BIODIESEL:OUTLOOK TO 20122

SO

YB

EA

N A

CR

ES

>100% increase in acres devoted to

biodiesel

Soybean Acres: With RFS and No Biofuel Tax Credit Extension

8

OVERVIEW

Feed and Fuel Demand Is Increasing; Only Time-Effective Solution Is Increasing Productivity Per Acre

0

100

200

300

400

500

600

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-070%

5%

10%

15%

20%

25%

30%

STRETCHING SUPPLY – ENDING STOCKS: WORLD SUPPLY AND USE FOR TOTAL GRAINS1

ME

TR

IC T

ON

S (

IN M

ILLI

ON

S)

ENDING STOCKS ENDING STOCKS AS A PERCENT OF TOTAL USE

1. USDA World Agricultural Supply and Demand Estimates

Annual grain carryover is declining – even at a period of

historic production levels

STATE OF AGRICULTURE:Monsanto’s Advantages

Monsanto is a technology company in an industry historically starved for breakthrough innovationInnovation:► Creates new value through

breakthrough products► Creates new markets that

didn’t exist before our products

Monsanto grows because of what we do, not what the commodity cycles do

Demand Requires Yield

Farmers Buy Yield

MARKET

CUSTOMER

9

SEED & TRAIT STRATEGY

At Farm Level, Production Decisions Reflect Cost-Benefit Analysis

BREAK-EVEN ANALYSIS:ILLINOIS CORN FARMER’S TRADE-OFF CORN-TO-SOYBEANS1

CURRENT SOYBEAN PRICE/BU

CURRENT CORN PRICE/BU

1. Analysis based on data published by University of Illinois, Department of Agricultural and Consumer Economics (http://www.farmdoc.uiuc.edu/manage/crop_budgets.pdf)

STATE OF AGRICULTURE:Farmer Production Decisions► Break-even analysis for

farmer in Central Illinois indicates the soy price needed to induce switch is 2.5X current corn price

► Even at ~$13 soybeans, returns still favor devoting acres to corn

BREAK-EVEN RATIOS

CORN-TO-SOY: 1:2.5

10

2008 U.S. TRAIT PENETRATION –ALL CHANNELS

1.6 1.4 0.94


Monsanto Has Portfolio Balance That Carries Between Crops When Acres Switch Year-to-Year

PORTFOLIO BALANCE:INDEXED GROSS PROFIT FOR MONSANTO-BRANDED CROP OFFERINGS

0.941.00

0.47

0

0.2

0.4

0.6

0.8

1

1.2

CORN COTTON SOYBEANS

STATE OF AGRICULTURE:Portfolio Balance

► In 2008, for every 1 million acres that shift from soybeans to either corn or cotton, on average, there is an estimated $0.01 EPS gain

► With brands in corn, cotton and soybeans, Monsanto is positioned to meet demand regardless of crop planting patterns in any given year

11


Monsanto’s Pricing Model Aimed at Value of Yield Created; Shared With Farmer

1. Monsanto estimates, based on better insect and weed control over conventional options2. Monsanto estimates, based on farmer surveys quantifying benefits such as convenience and peace of mind3. Retail price range for YieldGard VT Triple in 2008, at normal seeding rates4. Subtracts costs farmers would have spent had they not used a trait package

EXAMPLE : LOW-PRICE ENVIRONMENTFarmer Value Proposition On Triple Stack at $2.50 Corn PricesVALUE CREATION

Improved Yield1 15-20 bu/acCommodity Price: $2.50/bu

Per-Acre Trait Cost3 $28-$36– Cost of Replacements4 ($17)

Value: $37-$50

PRICING APPROACH

Indirect Benefits2 $5Incremental Value Created $42-$55

Incremental Farmer Cost $16-$19

With $2.50 corn, about 50% of the incremental yield value created is shared with the farmer; With $4.50 corn, about two-thirds of that value

accrues to the farmer

($17)– Cost of Replacements4

$28-$36Per-Acre Trait Cost3

$4.50/buCommodity Price:

PRICING APPROACH

$67-$90Value:

$16-$19Incremental Farmer Cost

$72-$95Incremental Value Created

$5Indirect Benefits2

15-20 bu/acImproved Yield1

VALUE CREATION

EXAMPLE : HIGH-PRICE ENVIRONMENTFarmer Value Proposition On Triple Stack at $4.50 Corn Prices

12


Performance Acceleration in DEKALB Powers Share Gains

YIELD ADVANTAGE:YIELD ADVANTAGE AND DEKALB SHARE TRENDS

STATE OF AGRICULTURE:Farmers Buy Yield

Farmer’s consistently cite “yield” as largest driver for purchasing DEKALB seed► In 2007, >14,000

comparisons show Monsanto germplasm outyields competitive best by 8.4 bu/ac1

► In 110-RM, Monsanto’s lead remains a strong 12 bu/ac advantage1

2008 GROWTH TARGETS

DEKALB 2-3 Share Points

ASI 1-2 Share Points

160

170

180

190

200

210

220

2001 2002 2003 2004 2005 2006 2007

DE

KA

LB

SH

AR

ED

EK

AL

BA

DV

AN

TA

GE

IN

110

-RM

(B

U/A

C) DEKALB Yield Performance

Competitive Yield Performance

DEKALB Share

1. 2007 Monsanto and third party trials through November 15, 2007. Weighted average, calculated to 15% moisture. DEKALB products are compared with national competitive products that contain similar crop protection traits.

13


With Added Trait Protection, Strong Growth Opportunity Remains For U.S. Corn

U.S

. TR

AIT

AC

RE

S(I

N M

ILLI

ON

S)

0

20

40

60

80

100

120

140

160

180

200

220

2005 2006 2007 2008 2010F

0

10

20

30

40

50

60 U.S

. TR

IPLE

-ST

AC

K A

CR

ES

(IN M

ILLION

S)

U.S. CORN TRAIT OPPORTUNITY: 2005-2010F

Trait acres reflect the total acres planted with each individual trait. In the case of stacked traits, each absolute acre will be reflected by two or more trait acres.Source: “Monsanto Biotechnology Trait Acreage” available through: monsanto.com/investors/

2007 2008F 2010 Opportunity

20.8M

42.4M

57.9M

45-55M

60-70M

80M

17.6M 45-55MTriple Stack 25-27M

Rootworm Control 26-28MCorn Borer Control 40-42M

63-65MGlyphosate Tolerance

CATALYSTS OF TRIPLE STACK

GROWTHChannel Triple PenetrationDEKALB Supply GuaranteeYield Insurance Program

14


With Roundup Ready 2 Yield Soybeans, Yield Also Becomes Focus of Next Wave of Commercial Products

Roundup Ready 2 Yield soybeans yield 7 to 11 percent higher than Roundup Ready soybeans based on 73 Monsanto field trials from 2004-2007

9%

7%

9%

7%

11%

0%

2%

4%

6%

8%

10%

12%

2004 2005 2006 2007

% Y

ield

Incr

ease

ove

r R

ound

up R

eady

Near-Isoline Comparisons:Roundup Ready 2 Yield vs. Roundup Ready

4 YEAR AVERAGE

ROUNDUP READY 2 YIELD SOYBEANS:SECOND-GENERATION WEED CONTROL FIELD RESULTS

STATE OF AGRICULTURE:A New Soybean Platform

► Roundup Ready 2 Yieldbecomes the platform for soybean traits

► Three soybean pipeline traits advanced to Phase 3 commercial development in recent R&D update

ROUNDUP READY 2 YIELD

VISTIVE III

DICAMBA-TOLERANT

HIGHER-YIELDING

15


Like Roundup RReady 2 Yield Soybeans, SmartStax Corn Reset the Trait Platform for Corn

SmartStax Value: On-Farm

+ Increased Yield (per-acre and on-farm)

YIELD COMPONENT YIELD BENEFIT1

PER-ACRE

Improved consistency: Primary pests

1-2%

Improved protection: Secondary pests

1-2%

ON-FARM

Reduced refuge 3-6%

+ Flexibility to move to one technology platform on-farm

+ Durability

+ Flexibility to increase planting populations

+ Platform for future traits+ Access to superior seed= Total SmartStax Value

1. Yield benefit reflects expected yield benefit above triple-stack standard, on a per-acre and whole-farm basis as noted. Ranges may overlap

Commercial Preparation: Field Data Generation

2006

Focus: Feasibility of full trait integration

YEAR 1 YEAR 2 YEAR 3 FORWARD

2008+

Focus: SmartStaxbred into elite germplasm; yield data generation

Field Testing: 2007Testing focused on trait performance, such as consistency of control of targeted pestsInitial 2007 Results• Indicates superior

rootworm consistency versus triple-stack standard

• Good control of secondary pests

TRIALS: 56STATES: 12

Entire Monsanto Pipeline Is Targeted Toward Meeting Emerging Trends Over Next Decade

DPHASE

1PHASE

2PHASE

3PHASE

4AGRONOMIC TRAITS

EXTRAX™ CORN PROCESSING SYSTEM + MAVERA™ HIGH-VALUE

CORN WITH LYSINE2

VISTIVE III SOYBEANS

HIGH-STEARATE SOYBEANS(VIA BIOTECH)

HIGH-OIL CORN

2ND-GEN HIGH-OIL SOYBEANS

SMARTSTAX CORN

SOYBEAN DISEASE

VALUE-ADDED TRAITS

DICAMBA-TOLERANT COTTON

SOYBEAN NEMATODE-RESISTANCE

INSECT-PROTECTED + ROUNDUP READY 2 YIELD SOYBEANS

DICAMBA-TOLERANT SOYBEANS

YIELDGARD VT PRO2ND-GEN YIELDGARD CORN BORER

YIELDGARD ROOTWORM III

BOLLGARD III

COTTON LYGUS CONTROL

OMEGA-3 ENRICHED SOYBEANS

ROUNDUP READY 2 YIELD SOYBEANS

HIGH-OIL SOYBEANSHIGHER-YIELDING + ROUNDUP

READY 2 YIELD CANOLA1

BROAD-ACRE HIGHER-YIELDING CANOLA FAMILY

DROUGHT-TOLERANT COTTON

2ND-GEN HIGHER-YIELDING SOYBEANS

BROAD-ACRE HIGHER-YIELDING SOYBEAN FAMILY

HIGHER-YIELDING SOYBEANS

DROUGHT-TOLERANT COTTON FAMILY

BROAD-ACRE HIGHER-YIELDING CORN FAMILY

HIGHER-YIELDING CORN

YIELD AND STRESS PIPELINE

NITROGEN-UTILIZATION CORN

NITROGEN-UTILIZATION CORN FAMILY

2ND-GEN DROUGHT-TOLERANT CORN

DROUGHT-TOLERANT CORN

DROUGHT-TOLERANT CORN FAMILY

PHASE

4PHASE

3PHASE

2PHASE

1D

The colored bar associated with each project indicates which phase that project is in. It is not intended to represent the relative status of the project within a particular stage.

High Impact Technologies (HIT) project

Jan. 3, 2008 Advancements/Additions

1. For higher-yielding + Roundup Ready 2 Yield canola, only the value of the higher-yielding trait is incorporated into the Yield and Stress collaboration with BASF2. Value of licensing the EXTRAX™ technology is shared with Cargill as a part of Renessen joint venture

BIOTECH TRAIT PIPELINE: JANUARY 2008 UPDATE


17

STATE OF AGRICULTURE:Breakthroughs in Nitrogen-Use Research


Projects Like Nitrogen-Utilization Corn Are Positioned to Drive Yield and Meet Demand In New Environment

PER-ACRE NITROGEN COST FOR CORN PRODUCTION, IN ILLINOIS: 1990-20071

$45

$50

$55

$60

$65

$70

$75

$80

1990 1992 1994 1996 1998 2000 2002 2004 2006

Nitrogen accounts for approximately one-fifth of the operating costs for a corn producer2

Nitrogen-Utilization corn offers the potential to bring the value of nitrogen into the seed:

• Reducing farmers’ exposure to nitrogen price volatility

• Boosting yield• Improving ease of use, flexibility

TRIALS IN MULTIPLE

HYBRID BACKGROUNDS

(16 LOC)

2006 2007

TRIALS IN MULTIPLE

HYBRID BACKGROUNDS

(15 LOC)

2005Yi

eld

Incr

ease

(bu/

Ac)

-202468

1012

Under normal nitrogen conditions, lead Nitrogen-Utilization trait has demonstrated yield advantages in multiple backgrounds over multiple years

Bar color correlates with the specific hybrid background tested.Same bar color in different tests and different years indicates same hybrid was used.All trials conducted under sufficient nitrogen application levels.

Statistically significant @ p≤0.10*

** *****

1. Illinois Farm Business Farm Management

2. USDA

18


Strong Cash Position Creates Opportunity to Bolster Strategic Position and Drive Differentiation Through Innovation

INVESTMENT OPPORTUNITY

In an expanding agriculture environment, value is defined by scarcity or innovation – Monsanto’s strategy is targeted on innovation: discovering and developing technology that is game-changing

CATEGORY HISTORICAL EXAMPLES OUTLOOK

Intensify The Space

Strengthen position of the core business, largely by building the germplasm footprint of seeds

Expansion to adjacent spaces –where core technology can be applied quickly and with transformational benefits

Investments that rewrite the landscape, providing new avenues, new technologies and creating new markets

► Delta and Pine Land► American Seeds, Inc.

(ASI) Companies► Agroeste (Brazil)

• ASI acquisition phase largely finished

• Continued opportunity for add-on international corn and vegetable companies

Expand The Space ► Seminis • Continually looking for areas where Monsanto can apply core technology quickly or benefit for advanced research

Redefine The Space ► Yield and Stress R&D Collaboration with BASF

► SmartStax agreement with Dow

► Global Seed Treatment Alliances

• Most highly transformational, but rarest to find appropriate fit

19


Global Seed Treatment Alliance Creates New, But Complementary Opportunity In Creating and Protecting Yield

STATE OF AGRICULTURE:Seed Treatment Alliances

Monsanto entered a series of separate alliances with leading global seed-treatment suppliers to create a platform to launch proprietary seed treatments launched in parallel with our future core-crop technologiesBENEFITS:

► Complement to established seed-and-trait strategy of creating and preserving yield

► Monsanto in-licenses active ingredients and leverages its existing formulation technology capabilities for proprietary treatments

► Strong margin opportunity

PROJECTED COMMERCIAL DEVELOPMENT TIMELINE

2008 2009 2010 2011

Canada

Latin America

U.S.Asia

ROW

Europe

• Global seed treatment sector: >$1.5B annually, with $800-$900M in the crops that are key to Monsanto’s business

• Sector CAGR of 10-12%• Widespread use of biotech traits

increases the use and value of seed treatments

GLOBAL SEED TREATMENT INDUSTRY OVERVIEW KEY INDUSTRY DATA1

1. Phillips McDougall and Monsanto Estimates

Alliance platform

established and activated

2009Launch

proprietary coatings with

Roundup Ready 2 Yield,

aimed at incremental

yield boost in soybeans

2010Proprietary

seed treatment in place for SmartStax

commercial launch

2011Seed

treatments expand into

cotton, on newest Delta

and Pine Land varieties

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2004 2007 2012

Given Growth Opportunities, Monsanto Has Potential to Double Gross Profit Over the Next Five Years

SUMMARY

2012 GROWTH RANGE

Gross profit targeted to double from 2007 through 2012

STRATEGIC PLAYBOOK

All growth is organic, from base business and pipeline

U.S. CornInternational CornSoybeansCottonSeminisR&D Pipeline

Acquisitions to be pursued, but are not included in this growth projectionEarnings continue to translate into operating cash, and value created for shareowners through combination of acquisitions, share repurchases and dividends

MONSANTO GROSS PROFITGROWTH TARGET

GR

OS

S P

RO

FIT

(IN

MIL

LIO

NS

)

MIL

ES

TO

NE

S

FEBRUARY 2008Monsanto increases

FY2008 Ongoing EPS guidance to $2.70-$2.80

from $2.50-$2.60

Reconciliation of Non-GAAP Financial Measures

Reconciliation of Free Cash FlowFiscal Year

2008Target

Net Cash Provided (Required) by Operations $1,950 - $2,050

(1,050)

$900 - $1,000

N/A

Effect of Exchange Rate Changes on Cash and Cash Equivalents N/A

N/A

Net Cash Provided (Required) by Investing Activities

Free Cash Flow

Net Cash Provided (Required) by Financing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

$ Millions

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