monsanto 09-16-08

Golden Opportunities: Working Jointly for Higher YieldsSeptember 16, 2008

Agenda

12:50 p.m. Welcome & introduction – Magdalena Moll

01:00 p.m. Yield & Stress Collaboration BASF Monsanto – Hans Kast

01:20 p.m. Growth and Value in Yield & Stress – Steve Padgette

01:50 p.m. Q&A by Hans Kast and Steve Padgette

02:20 p.m. Coffee break

02:40 p.m. Workshop “Pipeline Valuation” – Laura Meyer

03:10 p.m. Finding Outstanding Lead Genes – Johan Cardoen

03:30 p.m. Q&A by Johan Cardoen

04:00 p.m. Departure to Greenhouse by bus

04:30 p.m. Site tour CropDesign

05:25 p.m. Concluding remarks – Magdalena Moll

05:30 p.m. Departure

Forward-looking information

This presentation may contain forward-looking statements. These statements are based on current expectations, estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate.

Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed in BASF’s Report 2007 on pages 106ff. We do not assume any obligation to update the forward-looking statements contained in this presentation.

As It Pertains to BASF: As It Pertains to Monsanto:Certain statements contained in this presentation are "forward-looking statements," such as statements concerning the company'sfuture 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 bysuch forward-looking statements. Factors that could cause or contribute to such differences include, among others: the success of the companies’ research and development activities; the costs of and the companies’ abilities to access and enforce intellectual property needed for the collaboration; the costs and requirements of regulatory compliance and the speed with which approvals are received; public acceptance of biotechnology products; and otherrisks and factors detailed in the company's most recent periodicreport 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.

Monsanto Imagine and Vine Design, Corn States Triangle Design, Asgrow and Design, We Breed Better Beans, DEKALB Strong Roots. Strong Yields. and Design and Roundup Ready 2 Yield are trademarks owned by Monsanto Company and its wholly owned subsidiaries.

© 2008 Monsanto Company

1 | Yield & Stress Collaboration BASF Monsanto

2 | Growth and Value in Yield & Stress

3 | Valuation Workshop

4 | Finding Outstanding Lead Genes

Challenges in global agricultureAgricultural production has to be doubled in twenty years

• FoodUN estimate: 9.2 billion people in 2050

• FeedRising social standards drive global demand for more food, especially for meat consumption in Asia

• FiberCotton is the single most important textile fiber

• FuelUse of grain for fuel is growing by ~ 20% per year

We believe that the only technology to meet future demand is plant biotechnology

• Estimated marketvalue in 2025:$50 billion

• Market is dominated by agronomic traits and commodities

• Yield is the major market

Trait acreage in million ha

Market value in billion $

Specialties Mass market

1001

Yield

Feed

Herbicide tolerance

Specialtytraits

10

Energy crops

101

1000

100

Global market for biotech traits in 2025

Pest resistance

Collaboration in yield & stress tolerance

Strongest partnership in plant biotechnology

Collaboration strategy

Focus• Joint technology and commercialization collaboration• R&D pipeline for yield and stress tolerance traits• Crops: corn, soybeans, cotton, canola

Discovery• Independent discovery programs at each company• Lead genes go into joint development pipeline

Development• Nominated projects are jointly funded (50-50 cost sharing)• Potential overall R&D budget of $1.5 billion / €1.0 billion

Commercialization• Emerging products are commercialized by Monsanto• Broad-licensing approach across Monsanto’s commercial

channels• Value sharing: 60% for Monsanto, 40% for BASF

Collaboration creates joint pipelineFocus on yield and stress

CommercializationJoint DevelopmentIndependent Discovery

Licensed brands

Regional brands

National brands

Monsanto discovery program

BASF discovery program

• Broad-licensing approachto seed companies

• Value shared60% Monsanto, 40% BASF

• Potential R&D budget$1.5 / €1.0 billion

• Increasing probabilityof success (volume of lead genes)

• Increased rate of discovery

• Shorter early development timelines

®

BASF platform for gene discovery

Lookinside

Yield increase in crops

Metabolic profiling

Unique platform to identify and understand the gene functions of plants

Combines phenotypic screening with metabolic profiling determining gene function

High throughput of 5,000-10,000 genes tested per year

Phenotypic screening

Lookat plant

Look inside the plantThe value of analyzing the metabolome

Metabolite profiling

• Process which analyzes metabolite changes in plants:broad, fast, precise

• Over 1,000 important target metabolite “sensors” screenedin parallel

• 9,000 plant signals seen in parallel

• Plant cell: a complex network of thousands of chemical reactions

• Production of thousands of metabolites

Metabolic profiling

• Reveal the genes responsiblefor plant composition

• Identify genes and mechanismsfor plant performance

• Reveal plant response systems against environment and diseases

Look inside the plantThe value of analyzing the metabolome

Results support trait development

• Composition (e.g. oil, amino acids)

• Agronomics (e.g. yield, tolerance)

• Trait diagnostics (e.g. for development)

BASF discovery platform fuels progress

• Fully automated high throughput “live” crop screeningin rice

• Fastest growing genetic library in the industry

- Over 1.5 million metabolic profilesfor > 35,000 genes

• Cutting edge bioinformatics systems

• Fast and thorough intellectual property generation

• Early identification of highest potential development candidates

Complementary R&D platforms accelerate commercialization

Key results of the collaboration

• Gene nomination> 90% of gene nominations are unique

• Combination of pipelinesAccelerated development timeline

• Yield & stress transformation events~ 33% pipeline increase

• Genes/events evaluated> 12 million metabolic data points

• U.S. field trials 2008Planted yield & stress trials in nearly 175 locations

First products planned from 2012 onward

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10%

20%

30%

40%

50%

1964

/196

519

68/1

969

1972

/197

319

76/1

977

1980

/198

119

84/1

985

1988

/198

919

92/1

993

1996

/199

720

00/2

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2004

/200

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STRETCHING SUPPLYWORLD CORN AND SOYBEAN STOCKS-TO-USE1

ME

TR

IC T

ON

S (

IN M

ILLI

ON

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SOYBEAN STOCKS-TO-USE

STATE OF AGRICULTURE:Strong Demand Environment

FACTORS:

► 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

Increasing protein demand, coupled with boost from biofuels, creates sustained long-term grain demand

CORN STOCKS-TO-USE

• U.S. corn ending stocks-to-use ratio projected to be 12% for 2007/08 and down 28% to a 9% stocks-to-use ratio for 2008/09

• U.S. soybean stocks-to-use estimated to be 4.4% for 2007/08 and essentially flat for 2008/09, even with acres up nearly 18%

1. USDA PSD View database query for global corn and soybeans

STO

CK

S-T

O-U

SE

RA

TIO

Monsanto’s growth opportunity lies at the intersection of demand, innovation and execution

More demand requires more YIELD

More yield requires more INNOVATION

More innovation delivers more GROWTH

Monsanto’s simple philosophy on opportunity:



Probability of success improves as biotech traits move through four development phases

Key activities

• Trait development

• Pre-regulatory data

• Large scale transformation

• Lab & field testing

1 – 2 years1

DiscoveryPhase

Phase IProof of concept

Phase IIEarly product development

Phase IIIAdvanced development

Phase IVPre-launch

1 – 2 years1 1– 2 years1 1 – 3 years1

Launch

• Gene optimization

• Crop transformation

• Trait integration/breeding

• Field testing

• Regulatory data generation & submission

• Regulatory approvals

• Seed bulk-up

• Pre-marketing

• $100M = approximate costs to develop a biotech trait (Phase 1-4)• BASF and Monsanto share development costs (Phase 1-4) 50/50 for yield and stress traits

75%25% 50% 90%5 %Probabilityof success2

1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the estimated time here.

2. This is the estimated average probability that the traits will ultimately become commercial products, based on our experience. These probabilities may change over time. Commercialization is dependent on many factors, including successful conclusion of the regulatory process.

Genes selected for evaluation travel the circuit from sequencing to field testing

Step 1Gene sourcing& nomination

Step 2Gene cloning& sequencing

Step 3Transformation

Step 4Seed increase

Step 5Field testing

Step 6Data analysis& decision making

Collaborations and cutting-edge enablingtechnologies enhance Monsanto pipeline

DiscoveryPhase




Phase IVPre-launch

Alli

ance

Par

tner

s10

0’s

of c

olla

bora

tions

gl

obal

ly

Diff

eren

tiatin

g E

nabl

ing

Tech

nolo

gy

Protein Evolution

Spectral Imaging

Protein Structure

Comparative Genomics

Systems Biology

Automated Transformation

Automated Screening

Arcadia

Evogene

Devgen

Divergence

Ceres

Mendel

Chromatin

BASF

Yield & stress field testing builds on a core capabilityat Monsanto, with nearly 175 trial locations in 2008

Jacksonville, IL 2007

Jerseyville, IL 2007

Oriska, MN 2008

Legend• Phase I and II• Phase III and IV

2008 Total Monsanto biotech field trials

• >$100M invested in molecular markers platform

• Staff of >150 scientists using proprietary tools are supporting the further development and use of marker technology

• Capability to analyze 10s of millions of samples

• $75M investment in proprietary software tools

• 3 million marker-trait associations providing detailed genome understanding

Monsanto investment in molecular breeding is accelerating the rate of gain over conventional breeding

Soybean seed chipper

This capability fuels the creation of top-tier germplasmand sets the genetic knowledge base to deliver next-generation biotech traits

Automated marker analysis

Collaboration boasts industry-leading pipeline in yield and stress

Discoveryphase

Drought-tolerant corn familyDrought-tolerant corn2nd generation drought-tolerant corn

Nitrogen utilization corn familyNitrogen-utilization corn

Broad-acre higher-yielding corn familyHigher-yielding corn

Broad-acre higher-yielding soybean familyHigher-yielding soybeans2nd generation higher-yielding soybeans

Drought-tolerant cotton familyDrought-tolerant cotton

Broad-acre higher-yielding canola familyRoundup Ready® 2 Plus Yield canola*

Yield and stress pipeline Phase I Phase II Phase IVPhase III

High Impact Technologies (HIT) project

Jan. 3, 2008 Advancements/Additions

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.* For higher-yielding + Roundup Ready® 2 Plus Yield canola, only the value of the higher-yielding trait is incorporated

into the Yield and Stress collaboration with BASF.

January 2008 update

2007 dryland field tests of lead drought event offersvisual evidence of increased yield in stressed conditions

Drought-tolerant corn family:Lead project (HIT project, phase III)

Project conceptDrought-tolerance family aimed at providing consistent yield and buffering against effects of water limitations, primarily in areas of annual water stress

Family value considerations:• Launch-country acres*: 55M• 2020 value**: $300–$500M

Sources of value1. Improved yield: Targeting 6–10% yield

improvement in water-stress environmentsField test resultsIn 2007 tests in natural dryland environments from South Dakota to northern Texas, the lead drought-tolerant event outperformed conventional checks in 3 different hybrid backgrounds. Percentage yield difference vs. control ranged from 13.0% to 15.1%.* Acre opportunity reflects acres where technology fits at Monsanto’s

current 2007 market share in respective crops

** 2020 value reflects gross sales opportunity in launch country in year 2020 for the family

2007 field testing shows visual proof of yield improvement

Control hybrid(76 bu/ac)

With gene(94 bu/ac)

Superior, NE – field trials – 2007

0

2

4

6

8

10

12

14

16

Event 1 Event 2 Event 3 Event 1 Event 2 Event 3

Second-generation drought-tolerant corn delivered eight percent plus yield advantage in 2007 trials

Drought-tolerant corn family: Second-generation project (Status: phase II)

Project conceptThe second-generation of drought tolerant corn is aimed at boosting yield stability for broad-acre applications and reducing water input required in water-limited environments

Family value considerations• Launch-country acres*: 55M• 2020 value**: $300–$500M

Sources of value1. Improved yield: Targeting 6–10% yield

improvement in water-stress environments

2. Water substitution: Variable costs in pumped irrigation of >$100/acre

* Acre opportunity reflects acres where technology fits at Monsanto’s current 2007 market share in respective crops


Second-gen drought corn events provide consistent yield advantageDrought efficacy for second-gen events

• Seeking lead genes that work to improve the ways in which plants use water

• Evaluating plant growth under drought, root mass improvement, pollen growth, silk expansion and photosynthesis efficiency in determining drought tolerance

Lower-yielding environmentAverage yield: 53 bu/ac

2006 2007

Yiel

d di

ffere

nce

over

con

trol

s (%

)

Product concept target range

(All three events significant @ p ≤ 0.10); Statistical significance determined by ANOVA (2006) or nonparametric test (2007)

Higher-yielding environmentAverage yield: 166 bu/ac

In continued field testing, nitrogen utilization lead shows yield improvement under normal nitrogen

-2

0

2

4

6

8

10

12

Nitrogen-utilization corn family: Lead project (Status: phase I)

Project conceptTargets ways that corn plants can use nitrogen more efficiently, exploring potential to boost yield under normal nitrogen conditions or to stabilize it in low nitrogen environments


Sources of value1. Improved yield: Yield improvement in normal

nitrogen environments

2. Nitrogen reduction: Improving yield in low nitrogen environments



Nitrogen utilization lead demonstrates yieldadvantage under normal nitrogen conditions over multiple years

• Evidence of enhanced nitrogen use efficiency in lead genes indicated by enhanced photosynthesis, improved nitrogen assimilation, improved root mass or architecture improvement

2006 2007

Yiel

d In

crea

se (b

u/ac

)

2005

Trials in multiple hybrid backgrounds

(16 locations)

Trials in multiple hybrid backgrounds

(15 locations)

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

*

0

4

8

12

16

20

24

Hybrid 1 Hybrid 2 Hybrid 3 Normal Highdensity density

Higher-yielding corn offers yield advantage in both normal and high density planting rates

Higher-yielding corn family: Lead project (Status: phase II)

Project conceptHigher-yielding corn aimed at boosting intrinsic yield potential of corn through insertion of key genes

Family value considerations• Launch-country acres*: 55M• 2020 value**: >$1B

Sources of value1. Improved yield: Targeting 6-10% yield improvement



2007 higher-yielding corn agronomic testing versus controls

• Yield performance at 4–12 locations in the U.S. in 2007; commercial track events yield tested in the U.S. in 2008

• Lead genes tested for improved light response, increased biomass and kernel development

Ave

rage

yie

ld a

dvan

tage

(bu/

ac in

crea

se o

ver c

ontr

ol) Product concept benefit target range

Percentage yield difference vs. control:5.2% 6.4% 5.6%5.6% 8.4% 9.7% 7.3%

Event 1 Event 2

Latin America trials of higher-yielding soybeans confirm prior trials with 6-10 percent yield advantage

0

2

4

6

8

Event 1 Event 2 Event 3 Event 4 Event 5

Higher-yielding soybeans family: Lead project (Status: phase II)

Project conceptHigher-yielding soybeans aimed at boosting intrinsic yield potential of soybeans through insertion of key genes


Sources of value1. Improved yield: Targeting 6-10% yield

improvement



New: 2007/08 higher-yielding soybean agronomic testing versus controls

• 16 top-performing events advanced to Latin America South trial. Lead events showing strong yield advantages over conventional controls in both trials.

• Higher-yielding trait will be stacked on top of Roundup Ready 2 Yield and other soybean-pipeline traits.

Ave

rage

yie

ld a

dvan

tage

(bu/

ac in

crea

se o

ver c

ontr

ol)

Percentage yield difference vs. control:7.1% 6.0% 6.2% 10.2% 5.4% 8.8% 4.6% 10.5% 2.2% 10.3%

Season 1: 2007 U.S. field trips (18 locations)

Season 2: 2007/08 LAS field trips (12 locations)

Product concept target range

Cotton drought-tolerant leads offer yield improvements ranging from 4-19 percent

Drought-tolerant cotton (Status: phase I)

Project conceptDrought-tolerant cotton is designed to minimize risk in cotton farming by providing yield stability in environments experiencing sporadic or consistent water stress and by reducing water needs on irrigated acres.

Family value considerationsTo be decided when project enters Phase IIDrought-tolerant cotton is expected to reduce crop losses on dry-land acres and may reduce water costs in irrigated farming operations.

Field testing results In 2 years of testing, across both water stressed and non-stressed environments, and multiple locations, our two lead events generated a yield difference vs. the control of 4-19 percent.ControlWith gene

Mid-seasonHalfway, TX – September 2007

First year of broad-acre testing of Roundup Ready® 2 Plus Yield canola shows 11-14 percent increase

1000

1200

1400

1600

1800

2000

Event 1 Event 2 Event 3 Event 4 Event 5

Roundup Ready® 2 Plus Yield canola (Status: phase II)

Project conceptThis is a second-generation weed-control trait vector-stacked with a yield trait, aimed at increasing weed control and boosting the yield potential of canola by 15 percent

Value considerations• Launch-country acres*: 12M• 2020 value**: <$150M

Sources of value1. Improved yield: Targeting 15 percent

increase in yields


** 2020 value reflects gross sales opportunity in launch country in year 2020

Top 5 Roundup Ready® 2 Plus Yield events show yield increases from 11–14%

• In 1st year of broad-acre testing for commercial events, 5 events show significant increases in yield above 11% over matched control lines in 2007 field trials

• Events show full tolerance at 8x current Roundup Ready spray regime

Percentage yield difference vs. control:14% 13% 11% 12% 14%

Yiel

d (lb

s/ac

)

With gene No gene

** * * *

Strong pipeline value reflects commercial opportunity in emerging value in yield and stress

Nitrogen-utilization family

Discovery

Corn:Broad-acre yield

Yield and stress collaboration

Phase I Phase II Phase IVPhase III

CornSoybeans

Soybeans:Broad-acre yield

Mega>$1B

High$300M–$500M

Mid$150M–$300M

Low<$150M

2020 value ranges:

Family traits

Family traits

High

Mega

High

High

Drought-tolerant family

Broad-acre,higher-yielding family


Note: 2020 value reflects expected annual gross sales of trait in launch country in 2020.



Probability of success improves as biotech traits move through four development phases

Key activities

• Trait development

• Pre-regulatory data

• Large scale transformation

• Lab & field testing

1 – 2 years1

DiscoveryPhase




Phase IVPre-launch

1 – 2 years1 1– 2 years1 1 – 3 years1

Launch

• Gene optimization

• Crop transformation

• Trait integration/breeding

• Field testing

• Regulatory data generation & submission

• Regulatory approvals

• Seed bulk-up

• Pre-marketing

• $100M = approximate costs to develop a biotech trait (Phase 1-4)• BASF and Monsanto share development costs (Phase 1-4) 50/50 for yield and stress traits

75%25% 50% 90%5 %Probabilityof success2

1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the estimated time here.

2. This is the estimated average probability that the traits will ultimately become commercial products, based on our experience. These probabilities may change over time. Commercialization is dependent on many factors, including successful conclusion of the regulatory process.

Nitrogen-utilization family

Strong pipeline value reflects commercial opportunity in emerging value in yield and stress

Discovery

Corn:Broad-acre yield

Yield and stress collaboration

Phase I Phase II Phase IVPhase III

CornSoybeans

Soybeans:Broad-acre yield

Mega>$1B

High$300M–$500M

Mid$150M–$300M

Low<$150M

2020 value ranges:

Family traits

Family traits

High

Mega

High

High

Drought-tolerant family

Note: 2020 value reflects expected annual gross sales of trait in launch country in 2020.



• Valuation reflects expected annual gross trait sales value in the year 2020.

• Gross trait sales are presented for the initial country of launch only.

• Acre opportunities are based on acres where there is a technology fit.Additionally, acre opportunities for corn and soybeans reflect only the acres that correspond to the 2007 shares accessed in each respective market by Monsanto’s branded and licensed channels.

• These valuations do not reflect value attributed to other traits or germplasm.

• “Family” values include both first and second generation traits,if both are launched by 2020.

• Assumed launch dates coordinate with phase placement in the R&D pipeline and normal progression timelines.

Key assumptions in expected annual gross sales in launch country in 2020

Yield & stress valuation metrics

In 2007, Monsanto and BASF announced a Yield and Stress collaboration. For projects in this segment of the pipeline, there are additional key criteria that factor into valuation:

• Several projects are valued as families to take into consideration the successive generation projects.

• The profit in Yield and Stress will be shared between Monsanto and BASF,meaning 60% of the residual trait profits from the yield and stress traits commercialized will accrue to Monsanto and 40% will accrue to BASF.

Collaboration agreement provides for sharingof trait profits: 60% Monsanto and 40% BASF

Penetration of traits in countries outside initial launch country provide upside to values

Project Phase12020Value$ M

Countryof launch

Acreagepotential –

country of launch

Additionalgeographicopportunity

Soybean pipelineBroad-acre higher-yielding soybeans family 2 HIGH

$300 – $500 US 45 M Brazil, Argentina

Corn pipeline

Drought-tolerant corn family 3 HIGH$300 – $500 US 55 M Brazil, Argentina, EU27

Nitrogen-utilization corn family 1 HIGH$300 – $500

US 55 M Brazil, Argentina, EU27

Broad-acre higher-yielding corn family 2 MEGA

> $1,000 US 55 M Brazil, Argentina, EU27

Cotton and canola pipeline

Roundup Ready 2 Plus Yield canola2 2 LOW< $150 Canada 12 M US, EU27

Drought-tolerant cotton family 1 N/A US 10-15 M India, Australia, Brazil

Summary valuation table

1. For projects noted as “families,” phase designation represents status of first product in family2. Only the higher-yielding portion of this stack is part of the BASF and Monsanto Yield & Stress Collaboration

Pricing to value is hallmark of Monsanto’s value capture system for traits

$3/bu2

Commodity price

Potential yield value

Average yield

per acre

Yield increment

target

$27-$45/acre150 bu16-10%

1) INCREMENTAL YIELD

TOTAL VALUE CREATED$27-$45/acre,

say $45 for example

$18

HIGHER YIELDING CORN I EXAMPLE

Monsanto/BASF and partners = 1/3 to 1/2

Grower = 1/2 to 2/3

$27

1. Average yield per acre for corn in the U.S. was 151 bushels in 2007, as per the USDA; rounded to 150 bu/acre for example.

2. Utilized a corn commodity price of $3 for illustrative purposes; average price per bushel of corn received by a grower in the U.S. ranged from $2.00 to $4.25 per bushel from 2005 to 2007, as per the USDA.

Peace of mind

Potential for reduced crop insurance

3) OTHER

OpportunityAverageU.S. cost

Crop input replaced

N/A for this example

2) REPLACEMENT COSTS

Collaboration provides for sharing of profits generated by yield & stress traits commercialized

1. Assumes 90M acres of corn in U.S. multiplied by Monsanto’s current branded and licensed U.S. corn share

$18

Monsanto/BASF and partners = 1/3 to 1/2

Grower = 1/2 to 2/3

$27

TOTAL VALUE CREATED$27-$45/acre,

say $45 for example

Gross profit for trait

Net sales for trait

Less: Working capital charges

55Mx Volume (Acre opportunity – U.S.)1

$990MGross trait sales peak potential in the U.S.

= Residual trait value

x 60% = Monsanto portion

Less: R & D

Less: COGS for trait (royalties, etc.)

Less: S,G & A (marketing, corporate costs)

x 40%= BASF portion

Less: Share to channel (retail or licensed)

$18.00Retail trait price per acre

HIGHER YIELDING CORN I EXAMPLE

.217720480-lb balesCotton

.025401bushelsCorn

.027216bushelsSoybeans

Metric Ton Equivalent Factor1

Domestic unitCrop

1 Hectare = 2.471 Acres

1 Kilogram = 2.20462 lbs

$4.25, $3.04, $2.00 per bu

$.62, $.60, $.56 per lb

$6.43, $5.66, $5.74 per bu

2007,2006,20052

U.S. Weighted Average Farm Price

871 pounds/acreCotton

151 bushels/acreCorn

41 bushels/acreSoybeans

2007 Average U.S. Yield1

Crop

1. Source: USDA

2. Source: USDA, average price received by farmers for marketing year ended August 31st for soybeans and corn and year ended July 31st for cotton. For cotton used U.S. Memphis territory price per cotton outlook.

Key data for major crops in the collaborationMetric conversions and average U.S. yields

Reference – Product Pages

Product conceptHigher-yielding soybeans are aimed at boosting the intrinsic yield potential of the soybean through insertion of key genes. This project aims to increase soybean yields by 6-10 percent.

Need FulfilledHigher-yielding soybeans create additional harvestable yield for farmers, increasing their productivity. Higher yields are becoming important as population expands and as soybean growers look to meet growing demand for oil in areas like biodiesel and cooking. Additionally, as protein demand increases in key importing markets like China, higher yields offer farmers a way to better help meet that need.

Current statusThis project is in phase II, early product development. This includes conducting lab and field testing of genes in plants to select commercial product candidates and to advance the best performing events for regulatory testing. In 2007 testing, we took 68 events into the field for testing at 18 locations, with lead events showing strong yield advantages over conventional controls.1. 2020 value reflects gross sales opportunity, for the family, in launch country, in year 2020

2. Acre opportunity reflects areas where technology fits at Monsanto’s current 2007 – 2008 market share in respective crops

Higher-yielding soybeansPart of broad-acre, higher-yielding soybean family Phase II

Family Value Considerations / Status: phase II

2020 value1: $300 – $500MLaunch country: U.S.Launch-country acres2: 45MAdditional geographic opportunity: Brazil, Argentina

By increasing yield 6-10 percent, this product would offer farmers the option to get more yields per acre and additional flexibility in crops planted and market opportunities.

Jerseyville, IL – 2007

With yield trait Control

Product conceptFirst-generation drought tolerance is targeted to minimize uncertainty in farming by buffering against the effects of waterlimitation, primarily in areas of annual water stress. In the U.S., this area has historically been the dryland farms of the Western Great Plains.

Need fulfilledAgriculture uses over 70 percent of the world’s fresh water resources. Drought tolerant corn could offer farmers one way to reduce agriculture’s impact on the environment. Water is the biggest limiting factor in agriculture production. Every acre of corn faces some degree of water stress at some point in the growing season. This product could allow farmers to achieve more consistent yields even during times of water stress. Increased yield improves farmers’ productivity helping them meet growing demands for feed, food and fuel.

Current statusThe project is in the advanced development stage, phase III. This phase involves demonstrated efficacy of traits in elite germplasmand development of regulatory data as appropriate. It completed the fifth year of field trials in 2007.

Drought-tolerant cornPart of drought-tolerant corn family Phase III

Family value considerations / status: phase III

2020 value1: $300 – $500MLaunch country: U.S.Launch-country acres2: 55MAdditional geographic opportunity: Brazil Argentina EU27

Farmers value water-use in “acre-inches of water” needed to support yield potential. Farmers need 18-to-20 inches of moisture from natural or irrigated sources during the growing season to achieve normal Corn Belt yields. This product is targeting 6–10% yield improvement in water-stress environments, primarily in areas of annual water stress.

Superior, NE field trails – 2007

Control hybrid(76 bu/ac)

With gene 94 bu/ac

1. 2020 value reflects gross sales opportunity, for the family, in launch country, in year 2020


Product conceptThe second-generation of drought tolerant corn is aimed at boosting yield stability for broad-acre applications and reducing water input required in water-limited environments.

Need fulfilledAgriculture uses over 70 percent of the world’s fresh water resources. Drought tolerant corn could offer farmers one way to reduce agriculture’s impact on the environment. Water is the biggest limiting factor in agriculture production. Every acre of corn faces some degree of water stress at some point in the growing season. This product would allow farmers to achieve more consistent yields even during times of water stress. Increased yield improves farmers’productivity helping them meet growing demands for feed, food and fuel.

Current statusThis project is in phase II, early product development. This phase includes conducting lab and field testing of genes in plants to select commercial product candidates and for advancement of selected events into regulatory testing.

2nd Generation drought-tolerant cornPart of drought-tolerant corn family Phase II

Family value considerations / status: phase II

2020 value1: $300 – $500MLaunch country: U.S.Launch-country acres2: 55MAdditional geographic opportunity: Brazil, Argentina, EU27

Farmers value water-use in “acre-inches of water” needed to support yield potential. Farmers need 18-to-20 inches of moisture from natural or irrigated sources during the growing season. This product is targeting 6 – 10% yield improvement in water-stress environments, and could offer water substitution savings in pumped irrigation. Pumped irrigation has a variable cost of >$100/acre.

Control hybrid With gene



Product conceptNitrogen utilization targets ways that corn plants can use nitrogen more efficiently, exploring the potential to boost yield under normal nitrogen conditions or to stabilize yield where growers choose to apply lower nitrogen amounts due to rising fertilizer costs.

Need fulfilledNitrogen is one of the most important farm inputs and is the most price sensitive to petroleum-input costs. Nitrogen prices have risen sharply in recent years and are one of the most significant crop inputs for farmers.

Current statusThe project is in phase I, the proof of concept phase, including discovering new genes and evaluating these genes in our technology programs.

Nitrogen-utilization cornPart of nitrogen-utilization corn family Phase I

Family value considerations / status: phase I

2020 value1: $300 – $500MLaunch country: U.S.Launch-country acres2: 55MAdditional geographic opportunity: Brazil, Argentina, EU27

According to the USDA, nitrogen fertilizer represents one of thelargest input costs in agriculture, accounting for approximately one-fifth of the operating costs for a corn producer. Improving nitrogen-use efficiency in corn provides an opportunity for increased farmer profitability, while also offering a new way to reduce agriculture’s overall impact on the environment.

Farm process show – 2007



Product conceptHigher-yielding corn is aimed at boosting the intrinsic yield potential of corn hybrids by a targeted 6-10 percent through insertion of key genes.

Need fulfilledHigher yields are becoming ever more important. As population expands, as protein demand increases in key importing markets like China, and as renewable fuel becomes more important, higher yields offer farmers a way to better help meet these needs. Higher-yielding corn improves the productivity of farming by increasing average yield per acre.

Current statusThis project is in phase II, early product development. Lab and field testing of genes in plants are being conducted to select commercial product candidates and to advance the best performing events to regulatory trials. With three years of field data proving efficacy, higher-yielding corn emerged from proof-of-concept testing to Phase II development.

Family value considerations / status: phase II

2020 value1: >$1BLaunch country: U.S.Launch-country acres2: 55MAdditional geographic opportunity: Brazil, Argentina, EU27

Increasing yield on existing acres helps to make farming more profitable. Producing more on the same acre also improves land stewardship by not bringing additional acres into production to meet demand.



Higher-yielding cornPart of broad-acre, higher-yielding corn family Phase II

Product conceptThis is a second-generation weed-control trait vector-stacked with a yield trait, aimed at increasing weed control and boosting the yield potential of canola by 15 percent. This product would also provide improved nitrogen-use efficiency, giving the farmer the opportunity to trade off fertilizer costs while maintaining current yields.

Need fulfilledHigher yields are becoming important as population expands and demand for oil in areas like bio-diesel and cooking increases. Higher-yielding canola would create additional harvestable yield for farmers, increasing their productivity while providing increased weed control. Producing more on the same acre also improves land stewardship with limited arable land.

Current statusThis project is in phase II, early development. This includes con-ducting lab and field testing of genes in plants to select commercial product candidates and to identify the best performing events toadvance to regulatory trials. More than three years of field testing demonstrated consistent yield benefit for the lead gene in the United States and Canada.

Value considerations / status: phase II

2020 value1: <$150MLaunch country: CanadaLaunch-country acres2: 12MAdditional geographic opportunity: U.S., EU27, Australia

By increasing yield 15 percent, this offers farmers the option to get more yields per acre and additional flexibility in crops planted and market opportunities.

1. 2020 value reflects gross sales opportunity in launch country in year 2020

2. Acre opportunity reflects areas where technology fits in that country

Roundup Ready® 2 Plus Yield canolaHigher yielding portion of this stack is in collaboration with BASF Phase II

Higher-yieldingCanola

Conventional

Product conceptDrought-tolerant cotton is designed to minimize risk in cotton farming by providing yield stability in environments experiencing occasional or consistent water stress and by reducing water needs on irrigated acres.

Need fulfilledAgriculture uses over 70 percent of the world’s fresh water resources, and a product like drought tolerant cotton would offer farmers one way to reduce agriculture’s impact on the environment. Every acre of cotton faces some degree of water stress at some point in the growing season, and water is one of the biggest limiting factors in agriculture production. This product would allow farmers consistent yields even during times of drought. Increased yield creates additional harvestable yield for farmers, increasing their productivity to help meet growing demands for feed, food and fiber.

Current statusThe project is in phase I, the proof of concept phase. The trait is being introduced into diverse germplasm and undergoing multi-year testing, characterization and quality control. We are in the process of building a portfolio of genes that confer drought tolerance in cotton.

Family value considerations / status: phase I

To be decided when project enters phase II

Drought-tolerant cotton is expected to reduce crop losses on dry-land acres and may reduce water costs in irrigated farming operations.

Drought-tolerant cottonPart of drought-tolerant cotton family Phase I

With gene Control

CropDesign N.V.

• Located in Ghent, Belgium; 85 employees

• Founded in 1998 as a spin-off from VIB (Flanders Institute for Biotechnology)

• Acquired by BASF in June 2006

• Specialized in developing crops with improved traits for increase of crop productivity

• Focus is on rice as a commercial crop as well as a model plant for corn and other cereals

BASF platform for gene discovery

Lookinside

Yield increase in crops

Metabolic profiling

Unique platform to identify and understand the gene functions of plants

Combines phenotypic screening with metabolic profiling determining gene function

High throughput of 5,000-10,000 genes tested per year

Phenotypic screening

Lookat plant

Look at plant – phenotypic screening

• High throughput screening facility to identifylead genes for yield & stress in crops

• Screening rice as a model crop: - testing more than 140,000 plants/year- processing 50,000 digital images/day - screening runs 24/7

• Evaluation of more than 20 parameters for agricultural performance

• Identification of key yield components

• Testing under different growing conditions(e.g. optimal, drought, low nitrogen)

Broad and diversified pipeline of lead genes

Control Lead

Higher seed count: + 50%


Larger panicles: + 30%

Control Lead


Control Lead

Larger seeds: + 30%


Control Lead

Increased root biomass: + 20%

Control Lead

Increased green biomass: + 40%


Increased roots: +20%

Increased biomass: +40%

Larger panicles: +30%

Larger seeds: +30%

Higher seed count: +50%

More yield,

More value

Generating more yield and value for farmers

Field testing of lead genes discovered in greenhouse

Validatedlead gene

Gene discovery Field trial

Largest validated crop-baseddevelopment platform for productivity traits

Yield lead genes in the field

Increased yield : + 40%

Control Lead

• 235 field trials conducted

• Rate of lead genes confirmed in the field ~ 50%

Results clustered along traits

• Unique platform to monitor performance and select better lead genes

• Faster identificationof novel lead genes

• Knowledge of mode of action supports regulatory clearance and intellectual property generation

• Shortened time to market

Value creation through better and faster discovery of outstanding lead genes

Metabolic profiling

Phenotypicscreening

Concerted R&D approach for better productsEnabled through data integration from unparalleled platforms

Field trials

Data integration using cutting-edge bio-informatics platform

ResultsMethods

drought nitrogen

intrinsicyield

Strongest collaboration in plant biotechnology

• Unites the unique, complementary skills and experience of both companies

• Targets four major crops for value-creation:corn, soybeans, cotton, canola

• Focuses on yield which represents the largest value-creating opportunity in agriculture

• Delivers broadest pipeline in the industry for enhanced yield to the farmer

• Will create substantial value for farmers and for both collaboration partners

monsanto 09-16-08

Economy & Finance