monsanto 200412/08

1

Robert T. Fraley, Ph.D.Robert T. Fraley, Ph.D.

Chief Technology Officer and Executive Vice PresidentChief Technology Officer and Executive Vice President

1515thth Annual Chemical ConferenceAnnual Chemical Conference

Smith BarneySmith Barney

Dec. 8, 2004Dec. 8, 2004

2

ForwardForward--Looking StatementsLooking Statements

Certain statements contained in this presentation, such as stateCertain statements contained in this presentation, such as statements concerning the company's anticipated ments concerning the company's anticipated financial results, current and future product performance, regulfinancial results, current and future product performance, regulatory approvals, currency impact, business and atory approvals, currency impact, business and financial plans and other nonfinancial plans and other non--historical facts are "forwardhistorical facts are "forward--looking statements." These statements are based on looking statements." These statements are based on current expectations and currently available information. Howevecurrent expectations and currently available information. However, since these statements are based on factors that r, since these statements are based on factors that involve risks and uncertainties, the companyinvolve risks and uncertainties, the company’’s actual performance and results may differ materially from thoss actual performance and results may differ materially from those e described or implied by such forwarddescribed or implied by such forward--looking statements. Factors that could cause or contribute to sulooking statements. Factors that could cause or contribute to such differences ch differences include, among others: the company's exposure to various continginclude, among others: the company's exposure to various contingencies, including those related to Solutia Inc., encies, including those related to Solutia Inc., litigation, intellectual property, regulatory compliance (includlitigation, intellectual property, regulatory compliance (including seed quality), environmental contamination and ing seed quality), environmental contamination and antitrust; fluctuations in exchange rates and other developmentsantitrust; fluctuations in exchange rates and other developments related to foreign currencies and economies; related to foreign currencies and economies; increased generic and branded competition for the company's Rounincreased generic and branded competition for the company's Roundup herbicide; the accuracy of the companydup herbicide; the accuracy of the company’’s s estimates and projections, for example, those with respect to prestimates and projections, for example, those with respect to product returns and grower use of our products and oduct returns and grower use of our products and related distribution inventory levels; the effect of weather conrelated distribution inventory levels; the effect of weather conditions and commodity markets on the agriculture ditions and commodity markets on the agriculture business; the success of the companybusiness; the success of the company’’s research and development activities and the speed with which rs research and development activities and the speed with which regulatory egulatory authorizations and product launches may be achieved; domestic anauthorizations and product launches may be achieved; domestic and foreign social, legal and political d foreign social, legal and political developments, especially those relating to agricultural productsdevelopments, especially those relating to agricultural products developed through biotechnology; the companydeveloped through biotechnology; the company’’s s ability to successfully market new and existing products in new ability to successfully market new and existing products in new and existing domestic and international markets; the and existing domestic and international markets; the companycompany’’s ability to obtain payment for the products that it sells; the s ability to obtain payment for the products that it sells; the company's ability to achieve and maintain company's ability to achieve and maintain protection for its intellectual property; the effects of the comprotection for its intellectual property; the effects of the company's accounting policies and changes in generally pany's accounting policies and changes in generally accepted accounting principles; the company's ability to fund itaccepted accounting principles; the company's ability to fund its shorts short--term financing needs; general economic and term financing needs; general economic and business conditions; political and economic conditions due to thbusiness conditions; political and economic conditions due to threat of future terrorist activity and related military reat of future terrorist activity and related military action; and other risks and factors detailed in the company's fiaction; and other risks and factors detailed in the company's filings with the U.S. Securities and Exchange lings with the U.S. Securities and Exchange Commission. Undue reliance should not be placed on these forwardCommission. Undue reliance should not be placed on these forward--looking statements, which are current only as of looking statements, which are current only as of the date of this release. The company disclaims any current intthe date of this release. The company disclaims any current intention to revise or update any forwardention to revise or update any forward--looking looking statements or any of the factors that may affect actual results,statements or any of the factors that may affect actual results, whether as a result of new information, future events whether as a result of new information, future events or otherwise. or otherwise.

3

Additional DisclosuresAdditional Disclosures

This presentation uses the nonThis presentation uses the non--GAAP financial measure of earnings per share (GAAP financial measure of earnings per share (““EPSEPS””) excluding the effect of ) excluding the effect of certain items. A noncertain items. A non--GAAP EPS financial measure (which we sometimes refer to as EPS oGAAP EPS financial measure (which we sometimes refer to as EPS on an ongoing basis) may n an ongoing basis) may exclude the impact of restructuring charges, charges associated exclude the impact of restructuring charges, charges associated with the settlement of litigation, gains and losses with the settlement of litigation, gains and losses on the sale of assets, and certain other items. The specific iton the sale of assets, and certain other items. The specific items that are excluded from, and result in, our nonems that are excluded from, and result in, our non--GAAP EPS financial measure are clearly identified as such in thiGAAP EPS financial measure are clearly identified as such in this presentation. The presentation of EPS excluding s presentation. The presentation of EPS excluding the effect of certain items is intended to supplement investorsthe effect of certain items is intended to supplement investors’’ understanding of our operating performance. This understanding of our operating performance. This nonnon--GAAP financial measure may not be comparable to similar measuresGAAP financial measure may not be comparable to similar measures used by other companies. Furthermore, used by other companies. Furthermore, this nonthis non--GAAP financial measure is not intended to replace net income (loGAAP financial measure is not intended to replace net income (loss), cash flows, financial position, or ss), cash flows, financial position, or comprehensive income (loss), as determined in accordance with accomprehensive income (loss), as determined in accordance with accounting principles generally accepted in the counting principles generally accepted in the United States. The nonUnited States. The non--GAAP financial measure used in this presentation is reconciled tGAAP financial measure used in this presentation is reconciled to the most directly o the most directly comparable financial measure calculated and presented in accordacomparable financial measure calculated and presented in accordance with GAAP and can be found at the end of nce with GAAP and can be found at the end of this presentation.this presentation.

Fiscal YearFiscal YearIn this presentation, unless otherwise specified:In this presentation, unless otherwise specified:References to years, or to fiscal years, 2001 through 2006 are oReferences to years, or to fiscal years, 2001 through 2006 are on a fiscal year basis and refer to the 12n a fiscal year basis and refer to the 12--month period month period

ending August 31.ending August 31.

TrademarksTrademarksRoundup, Roundup Ready, Bollgard, Bollgard II, YieldGard, AsgrowRoundup, Roundup Ready, Bollgard, Bollgard II, YieldGard, Asgrow, DeKalb, VISTIVE, and the Monsanto, Imagine and , DeKalb, VISTIVE, and the Monsanto, Imagine and vine logo are trademarks owned by Monsanto Company and its whollvine logo are trademarks owned by Monsanto Company and its wholly owned subsidiaries. All other trademarks are y owned subsidiaries. All other trademarks are the property of their respective owners. the property of their respective owners. ©© 2004. Monsanto Company. All Rights Reserved.2004. Monsanto Company. All Rights Reserved.

4

Biotechnology Is Most Rapidly Adopted Technology in Biotechnology Is Most Rapidly Adopted Technology in History of AgricultureHistory of Agriculture

Global Monsanto Planted Biotech AcresGlobal Monsanto Planted Biotech Acres

OverviewOverview

Acres in millionsAcres in millions

0

20

40

60

80

100

120

140

160

180

1996 1997 1998 1999 2000 2001 2002 2003 2004

Canola

Cotton

Corn

Soybeans

Source: Monsanto estimatesSource: Monsanto estimates

5

Biotechnology Provides Better Economical and Biotechnology Provides Better Economical and Environmental SolutionsEnvironmental Solutions

OverviewOverview

Effect of Biotech Crops on U.S. Pesticide UseEffect of Biotech Crops on U.S. Pesticide Usein 2003in 2003 Million Million

Lbs.Lbs.

SoybeansSoybeans (20)(20)

CornCorn (13)(13)

CottonCotton (13)(13)

CanolaCanola (0.2)(0.2)

Total Reduction in Total Reduction in Pesticide UsePesticide Use (46)(46)

Source: Source: ““US Agriculture of Biotechnology Derived Crops Planted in 2003 US Agriculture of Biotechnology Derived Crops Planted in 2003 –– An Update of Eleven cases An Update of Eleven cases of Eleven Case Studies,of Eleven Case Studies,”” National Center for Food & Agriculture Policy. October 20, 20National Center for Food & Agriculture Policy. October 20, 200404

6

Early, Major Investment in Seeds Captured Value ShiftEarly, Major Investment in Seeds Captured Value ShiftOverviewOverview

Source: Monsanto EstimatesSource: Monsanto Estimates

0%

10%

20%

30%

40%

50%

60%

2001 2002 2003 2004

Monsanto Seed Partners ShareMonsanto Seed Partners Share

Monsanto Brand ShareMonsanto Brand ShareMonsanto Genetic Market Share in U.S. Corn SeedMonsanto Genetic Market Share in U.S. Corn Seed

American Seeds Brand ShareAmerican Seeds Brand Share

43%43% 45%45%48%48%

49%49%

7

Monsanto Now Services Seed Market Monsanto Now Services Seed Market Through Three OutletsThrough Three Outlets

OverviewOverview

American Seeds, Inc.American Seeds, Inc.American Seeds, Inc.

Branded Seed Businesses

Seed Partners

Autonomous Seed Co.

Autonomous Seed Co.

Autonomous Seed Co.

Genomics-Based R&D Pipeline

8

Product Development, Regulatory and Commercial Product Development, Regulatory and Commercial Experience Generate MomentumExperience Generate Momentum

OverviewOverview

0123456

MON DD BAY DOW SYT BAS

Pipeline products Pipeline products in USDA in USDA

review processreview process

05

1015202530


USDA BiotechUSDA BiotechApprovalsApprovals

020406080

100120140


U.S. Trait Acres U.S. Trait Acres 20042004

9

Round 1:Round 1: Seed and SingleSeed and Single--Trait Positions Firmly Trait Positions Firmly Established and GrowingEstablished and Growing

•• Seed Breeding AdvancementsSeed Breeding Advancements

•• FirstFirst--Generation TraitsGeneration Traits

•• Geographic ExpansionGeographic Expansion

•• Value CaptureValue Capture

Round 1

10

Industry’s Most Diverse Genetic Pool Created Industry’s Most Diverse Genetic Pool Created New OpportunitiesNew Opportunities

Round 1: BreedingRound 1: Breeding

TemperateTemperateTemperate

Sub-TropicalSubSub--TropicalTropical

TropicalTropicalTropical

Sub-TropicalSubSub--TropicalTropical

TemperateTemperateTemperate

6-to-8 year process66--toto--8 year process8 year processLate 1990sLate 1990s

Acquired 36 major corn Acquired 36 major corn breeding programsbreeding programs

((12 countries x average of 3 12 countries x average of 3 companies per country)companies per country)

Early 2000sEarly 2000sCrossed genetic lines Crossed genetic lines

across acquired across acquired companiescompanies

TodayTodayLaunching new hybrids Launching new hybrids

from interfrom inter--company company crossescrosses

Monsanto Monsanto corn corn

germplasm germplasm flows flows

globallyglobally

11

Yield Gains from Seed Breeding AcceleratingYield Gains from Seed Breeding AcceleratingRound 1: BreedingRound 1: Breeding

High Performing Germplasm

150

160

170

180

190

200

210

220

95 100 105 110 115

Monsanto BrandCompetitors

Relative Maturity (Days)

Corn Yield (Bushels/Acre)

MON 2004 Branded Yield vs. Competitors

40

45

50

55

60

65

Group I Group II Group III Group IV Group V

Monsanto BrandCompetitors

Maturity Zones

Soybean Yield (Bushels/Acre)

MON 2004 Branded Yield vs. Competitors

Source: Monsanto estimate, includes ASI formation

12DiscoveryDiscovery Phase 1Phase 1

Proof of ConceptProof of ConceptPhase 2Phase 2

Early DevelopmentEarly DevelopmentPhase 3Phase 3

Adv. DevelopmentAdv. DevelopmentPhase 4Phase 4

PrePre--LaunchLaunchLaunchLaunch

Available Market for Roundup Ready Corn Is GrowingAvailable Market for Roundup Ready Corn Is GrowingRound 1: Geographic ExpansionRound 1: Geographic Expansion

Key Market AcresKey Market AcresKey Market Acres

0%0%0%0%0%0%33%33%33%Percent Penetrated (2004)Percent Penetrated (2004)Percent Penetrated (2004)5M5M5M20M20M20M50M50M50MAvailable MarketAvailable MarketAvailable Market

ArgentinaArgentinaArgentinaBrazilBrazilBrazilU.S.U.S.U.S.Contributing PlatformsContributing Platforms

GenomicsGenomics

ConventionalConventionalBreedingBreeding

Crop AnalyticsCrop Analytics

BiotechnologyBiotechnology

MolecularMolecularBreedingBreeding

Regulatory ProcessesRegulatory ProcessesEuropean UnionEuropean Union

22 products in regulatory queue 22 products in regulatory queue under Directive 2001/18; 11 from under Directive 2001/18; 11 from MonsantoMonsanto

Roundup Ready corn (NK603) Roundup Ready corn (NK603) approved for importation and whole approved for importation and whole corn feed in July 2004; approved for corn feed in July 2004; approved for Novel Food in October 2004Novel Food in October 2004

Applications for stacks in queueApplications for stacks in queue

ArgentinaArgentina

NK603 approved for planting in NK603 approved for planting in Argentina in July 2004Argentina in July 2004

Application for stacks in queueApplication for stacks in queue

11

13

Contributing PlatformsContributing Platforms

DiscoveryDiscovery Phase 1Phase 1Proof of ConceptProof of Concept

Phase 2Phase 2Early DevelopmentEarly Development

Phase 3Phase 3Adv. DevelopmentAdv. Development

Phase 4Phase 4PrePre--LaunchLaunch

LaunchLaunch

Available Market for Roundup Ready Corn Is GrowingAvailable Market for Roundup Ready Corn Is GrowingRound 1: Geographic ExpansionRound 1: Geographic Expansion

22 Grain Channeling in the United StatesGrain Channeling in the United States

Business ApproachBusiness ApproachWebsite indicates to farmers Website indicates to farmers which elevators in their area which elevators in their area accept biotech grain not yet accept biotech grain not yet approved for import into the approved for import into the European UnionEuropean UnionCommunication and Communication and education program under wayeducation program under wayPercent of growers citing Percent of growers citing grain marketing concerns has grain marketing concerns has dropped from roughly 60% to dropped from roughly 60% to nearly 30% in past year*nearly 30% in past year*

*Based on Roundup Ready corn surveys taken in fall of 2003 and *Based on Roundup Ready corn surveys taken in fall of 2003 and spring of 2004 in Eastern Iowa/Northern Illinois regionspring of 2004 in Eastern Iowa/Northern Illinois region

www.866sellcorn.comwww.866sellcorn.com


0%0%0%0%0%0%33%33%33%Percent Penetrated (2004)Percent Penetrated (2004)Percent Penetrated (2004)5M5M5M20M20M20M50M50M50MAvailable MarketAvailable MarketAvailable Market

ArgentinaArgentinaArgentinaBrazilBrazilBrazilU.S.U.S.U.S.

GenomicsGenomics










Round 1: FirstRound 1: First--Generation TraitsGeneration TraitsYieldGard Rootworm Continues High Satisfaction YieldGard Rootworm Continues High Satisfaction Pattern with Biotech TraitsPattern with Biotech Traits


0%0%0%0%0%0%9%9%9%Percent Penetrated (2004)Percent Penetrated (2004)Percent Penetrated (2004)1M1M1M5M5M5M15M-20M15M15M--20M20MAvailable MarketAvailable MarketAvailable Market


11 Grower SatisfactionGrower Satisfaction

11Based on all growers using specified seed and treatment and ableBased on all growers using specified seed and treatment and able to answer very satisfied, somewhat satisfied, neutral, or not sto answer very satisfied, somewhat satisfied, neutral, or not satisfied.atisfied.*Source: Marketing Horizons Trait Satisfaction Studies 2002*Source: Marketing Horizons Trait Satisfaction Studies 2002**Source: Marketing Horizons Trait Satisfaction Studies 2004**Source: Marketing Horizons Trait Satisfaction Studies 2004

0%

20%

40%

60%

80%

100%

RoundupRoundupReadyReady

Soybeans*Soybeans*

RoundupRoundupReady Ready Cotton*Cotton*

Bollgard/Bollgard/RoundupRoundup

ReadyReadyCotton*Cotton*

Roundup Roundup ReadyReadyCorn*Corn*

YieldGardYieldGardRootwormRootworm

Corn**Corn**

YieldGardYieldGardCornCorn

Borer*Borer*

Percent of customers very or somewhat satisfiedPercent of customers very or somewhat satisfied11


GenomicsGenomics





15


22 Split Planter 32Split Planter 32--Inch Rows Inch Rows –– Rock County, MN Rock County, MN –– August 2004August 2004

12121111886644151533

11

1.1. DEKALB DKC46DEKALB DKC46--22 22 –– YieldGard RootwormYieldGard Rootworm2.2. Mycogen 2K541 CruiserMycogen 2K541 Cruiser3.3. DEKALB DKC42DEKALB DKC42--88 88 –– YieldGard RootwormYieldGard Rootworm4.4. DEKALB DKC52DEKALB DKC52--40 40 –– YieldGard RootwormYieldGard Rootworm5.5. Wensman W6212RR untreatedWensman W6212RR untreated6.6. DEKALB DKC42DEKALB DKC42--88 88 –– YieldGard RootwormYieldGard Rootworm7.7. Pioneer 38H66 CruiserPioneer 38H66 Cruiser8.8. DEKALB DKC51DEKALB DKC51--39 39 –– YieldGard RootwormYieldGard Rootworm9.9. DEKALB DKC47DEKALB DKC47--10 P25010 P25010.10. DEKALB DKC46DEKALB DKC46--28 P25028 P25011.11. DEKALB DKC42DEKALB DKC42--88 88 –– YieldGard RootwormYieldGard Rootworm12.12. DEKALB DKC46DEKALB DKC46--22 22 –– YieldGard RootwormYieldGard Rootworm13.13. AgVenture 4882RR Cruiser CRWAgVenture 4882RR Cruiser CRW14.14. Channel 6965RR Cruiser CRWChannel 6965RR Cruiser CRW15.15. DEKALB DKC42DEKALB DKC42--88 88 –– YieldGard RootwormYieldGard Rootworm16.16. Kruger 93P92 untreatedKruger 93P92 untreated

16






LaunchLaunch



0%0%0%0%0%0%9%9%9%Percent Penetrated (2004)Percent Penetrated (2004)Percent Penetrated (2004)1M1M1M5M5M5M15M-20M15M15M--20M20MAvailable MarketAvailable MarketAvailable Market


GenomicsGenomics





33 Advantage of Bigger and Healthier RootsAdvantage of Bigger and Healthier Roots

From 172 field trials in Illinois in 2004

− YieldGard Rootworm had greater yield than competition

− Just under 12 bushels per acre advantage, or just over $33 per acre

190

200

210

220

Yield (Bushels/Acre) 460

480

500

520

Gross Income ($/Acre)YieldGard Rootworm Competition

17

Round 2:Round 2: Monsanto Is Uniquely Positioned To Monsanto Is Uniquely Positioned To Bring Next Generation of Traits to MarketBring Next Generation of Traits to Market

•• Continued Growth from Round 1 Continued Growth from Round 1

•• SecondSecond--Generation TraitsGeneration Traits

•• Greater Intensity of Stacked TraitsGreater Intensity of Stacked Traits

Round 2Round 1







0%0%0%0%0%0%Percent PenetratedPercent PenetratedPercent Penetrated0.5M – 0.8M0.5M 0.5M –– 0.8M0.8M10M-15M10M10M--15M15MAvailable MarketAvailable MarketAvailable MarketAustraliaAustraliaAustraliaU.S.U.S.U.S.

Roundup Ready Flex Cotton Raises the BarRoundup Ready Flex Cotton Raises the BarRound 2: SecondRound 2: Second--Generation TraitsGeneration Traits

11 Expanded Window of ApplicationExpanded Window of Application

EmergenceEmergence LaybyLayby Preharvest HarvestPreharvest Harvest

OverOver--thethe--top window of applicationtop window of applicationRoundup ReadyRoundup Ready®® Flex Cotton Flex Cotton

Roundup ReadyRoundup Ready®®

CottonCotton((< < 4 lf.)4 lf.)

Expanded window of overExpanded window of over--thethe--top applicationtop application-- Increased margin of crop safetyIncreased margin of crop safety-- More More ““flexibleflexible”” weed controlweed control

Increased grower convenienceIncreased grower convenienceReduced need for specialized spray equipmentReduced need for specialized spray equipment


GenomicsGenomics





19






LaunchLaunch



Roundup Ready Flex Cotton Raises the BarRoundup Ready Flex Cotton Raises the BarRound 2: SecondRound 2: Second--Generation TraitsGeneration Traits

Over 200 field trials conducted in Over 200 field trials conducted in 20042004

8 cotton seed companies 8 cotton seed companies participating in trial programparticipating in trial program

Cotton States launching Cotton States launching exclusively on a secondexclusively on a second--generation generation trait platformtrait platform

22 2004 Field Trial Update2004 Field Trial Update

GenomicsGenomics





20






LaunchLaunch



Round 2: SecondRound 2: Second--Generation TraitsGeneration Traits

GenomicsGenomics





Broad Licensing Supports Roundup Ready Flex Broad Licensing Supports Roundup Ready Flex IntroductionIntroduction

33 Broad LicensingBroad LicensingBroad licensing mitigates risk of seed market share Broad licensing mitigates risk of seed market share changeschanges

0%

25%

50%

75%

100%

1999 2000 2001 2002 2003 2004

DPLStonevilleFiberMaxPhytogenOthers

U.S. cotton seed market sharesU.S. cotton seed market shares

Source: USDASource: USDA

21

1.5

1.2

1.01

1.1

1.2

1.3

1.4

1.5

1.6

1996 1997 1998 1999 2000 2001 2002 2003 2004F 2005F 2006F

Cotton (2 Traits)

Corn (3 Traits)

Soybeans (1 Trait)

Stacking Biotech Traits Adds New Dimension to Stacking Biotech Traits Adds New Dimension to Market Potential Market Potential —— Multiplying Margin OpportunitiesMultiplying Margin Opportunities

Monsanto U.S. Biotech Intensity Index*Monsanto U.S. Biotech Intensity Index*

Average number of biotech traits per biotech acreAverage number of biotech traits per biotech acre

Round 2: Stacked TraitsRound 2: Stacked Traits

10 million 10 million biotech biotech acresacres

16 million16 millionbiotech biotech margin margin

opportunitiesopportunities

==XX1.5 1.5

intensity intensity indexindex

CottonCotton42 million 42 million biotech biotech acresacres

52 million52 millionbiotech biotech margin margin

opportunitiesopportunities

==XX1.2 1.2

intensity intensity indexindex

CornCornU.S. Biotech Margin OpportunitiesU.S. Biotech Margin Opportunities

* Monsanto traits only* Monsanto traits only

22

Round 3:Round 3: Pipeline Potential Builds on Established Pipeline Potential Builds on Established PlatformPlatform

•• Continued Growth from Rounds 1 & 2Continued Growth from Rounds 1 & 2

•• Improved Food and Feed Biotech TraitsImproved Food and Feed Biotech Traits

•• Biotech Yield TraitsBiotech Yield Traits

Round 1 Round 2 Round 3

23

Pipeline Products Reach New Markets and Expand Pipeline Products Reach New Markets and Expand Base in Corn, Soybeans and CottonBase in Corn, Soybeans and Cotton

Round 3: Food, Feed and Yield TraitsRound 3: Food, Feed and Yield Traits

Roundup Ready Roundup Ready Flex CottonFlex Cotton

Commercialized Agronomic TraitsCommercialized Agronomic Traits

Roundup Roundup Ready Corn, Ready Corn, Soy, CottonSoy, Cotton

YieldGard YieldGard Corn BorerCorn Borer

Bollgard I & II Bollgard I & II CottonCotton

YieldGard YieldGard Rootworm Rootworm

CornCorn

YGCB II CornYGCB II Corn YGRW II CornYGRW II Corn22ndnd GenerationGenerationAgronomic TraitsAgronomic Traits

Nitrogen Nitrogen Utilization CornUtilization Corn

Cold Tolerant Cold Tolerant CornCorn

Drought Tolerant Drought Tolerant Corn, Soy, CottonCorn, Soy, Cotton

YieldYield

Low Linolenic Low Linolenic SoySoy

Healthier Oil SoyHealthier Oil Soy(Low Linolenic(Low Linolenic

Mid OleicMid OleicLow Saturate)Low Saturate)

OmegaOmega--3 Soy3 Soy(Stearidonic acid)(Stearidonic acid)

FoodFoodFeedFeed

High Lysine CornHigh Lysine Corn

Enhanced High Enhanced High Lysine CornLysine Corn

Improved Protein Improved Protein SoySoy

Improved Protein SoyImproved Protein Soy(Beta Conglycinin)(Beta Conglycinin)

24

Round 3: Feed TraitsRound 3: Feed Traits

High Lysine Enhances Essential Amino Acids in FeedHigh Lysine Enhances Essential Amino Acids in Feed





LaunchLaunch


0%0%0%0%0%0%0%0%0%Percent PenetratedPercent PenetratedPercent PenetratedTBDTBDTBDTBDTBDTBDTBDTBDTBDAvailable MarketAvailable MarketAvailable Market

ArgentinaArgentinaArgentinaBrazilBrazilBrazilU.S.U.S.U.S.Contributing PlatformsContributing Platforms

GenomicsGenomics





11 High Lysine Corn High Lysine Corn Enhance level of limiting Enhance level of limiting essential amino acids in feedessential amino acids in feed

Lower cost of animal feed rationLower cost of animal feed ration

Improved amino acid balanceImproved amino acid balance

High Lysine Corn High Lysine Corn –– Total LysineTotal Lysine

Inde

xed

Inde

xed

00

5050

100100

150150

Neg.Neg. Neg.Neg.Pos.Pos. Pos.Pos.Event 1Event 1 Event 2Event 2

TargetTargetIncreased total Increased total energyenergy

U.S. regulatory U.S. regulatory packages packages submittedsubmitted

25

Round 3: Feed TraitsRound 3: Feed Traits

High Lysine Enhances Essential Amino Acids in FeedHigh Lysine Enhances Essential Amino Acids in FeedContributing PlatformsContributing Platforms





LaunchLaunch




22 2004 Field and Feeding Trial Update2004 Field and Feeding Trial Update

Field trials conducted in United Field trials conducted in United States and Argentina this yearStates and Argentina this yearEvaluating over 12 hybrid Evaluating over 12 hybrid genotypes in this yeargenotypes in this year’’s programs programExcellent performance Excellent performance demonstrated in feeding trials to demonstrated in feeding trials to datedate

GenomicsGenomics





26






LaunchLaunch

High Lysine Enhances Essential Amino Acids in FeedHigh Lysine Enhances Essential Amino Acids in FeedRound 3: Feed TraitsRound 3: Feed Traits




GenomicsGenomics






Initial evaluations show germplasm hitting or exceeding Initial evaluations show germplasm hitting or exceeding efficacy targetsefficacy targets

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Free

Lys

ine

(ppm

)

Neg HybridControls

South America Neg HybridControls

U.S.







0%0%0%0%0%0%0%0%0%Percent PenetratedPercent PenetratedPercent PenetratedTBDTBDTBDTBDTBDTBD5M5M5MAvailable MarketAvailable MarketAvailable Market


Preparing for 2005 Launch of FirstPreparing for 2005 Launch of First--Generation Output Generation Output Trait Trait —— VISTIVE SoybeansVISTIVE Soybeans

Round 3: Food TraitsRound 3: Food Traits


GenomicsGenomics





1 VISTIVE Low Linolenic Soy

Reduce/eliminate trans fats with increased oil stability, requiring less hydrogenation

Achieve yield parity and stack with Roundup Ready trait

Reduce linolenic acid to <3%

Standard Soybean

Low Lin

Linoleic18:2

Oleic18:1

Sats18:0 / 16:0

Linolenic18:3

Mid Oleic + Low Lin

Zero Sat + Mid Oleic + Low Lin

28






LaunchLaunch


0%0%0%0%0%0%0%0%0%Percent PenetratedPercent PenetratedPercent PenetratedTBDTBDTBDTBDTBDTBD5M5M5MAvailable MarketAvailable MarketAvailable Market


Preparing for 2005 Launch of FirstPreparing for 2005 Launch of First--Generation Output Generation Output Trait Trait —— VISTIVE SoybeansVISTIVE Soybeans

Round 3: Food TraitsRound 3: Food Traits


Advanced field testing Advanced field testing Shipping several tons of oil to food Shipping several tons of oil to food companies for food formulation testingcompanies for food formulation testingFinalizing processor programs; Ag Finalizing processor programs; Ag Processing, Inc. (AGP) and Cargill Processing, Inc. (AGP) and Cargill participatingparticipatingLaunch in 2005Launch in 2005

GenomicsGenomics













Round 3: Food TraitsRound 3: Food TraitsOmegaOmega--3 3 Biofortification Is a Food Industry Biofortification Is a Food Industry BreakthroughBreakthrough

PIC?PIC?


GenomicsGenomics





11 Oilseed Produced OmegaOilseed Produced Omega--33

American Heart Assn., American Heart Assn., American Dietetic American Dietetic Assn., and 1,600+ Assn., and 1,600+ research studies research studies support health benefitssupport health benefitsVegetable oils Vegetable oils enriched with bioenriched with bio--available Omegaavailable Omega--33OmegaOmega--3 promotes 3 promotes heart healthheart healthEnhanced stabilityEnhanced stability

Dietary Omega-3 in Biotech Oilseed

Mono-unsaturates

Saturates

Other Poly-unsaturates

New Bio-available Omega-3

0

20

40

60

80

100%

ControlOilseed

BiotechOilseed

Fatty Acid (wt%)









Round 3: Food TraitsRound 3: Food TraitsOmegaOmega--3 3 Biofortification Is a Food Industry Biofortification Is a Food Industry BreakthroughBreakthrough

PIC?PIC?


GenomicsGenomics






SDA/GLA Levels(7 Lead Events in 9 Locations)

0

5

1015

20

25

30

SDAGLA

Fatty

Aci

d W

t %

Target









Round 3: YieldRound 3: YieldDrought Stress Tolerance Is One of Potential New Drought Stress Tolerance Is One of Potential New Agronomic Traits in PipelineAgronomic Traits in Pipeline


GenomicsGenomics





11 Drought ToleranceDrought ToleranceYield protectionYield protectionon all acres to on all acres to protect against protect against water deficitswater deficits

Yield enhancementYield enhancementon all acres on all acres through improved through improved water usewater use

Cost savingsCost savingson irrigated acreson irrigated acres

Pricing depends on choice Pricing depends on choice of marketof market

Stack with weed and insect Stack with weed and insect control traits enhances control traits enhances margin opportunitymargin opportunity

32






LaunchLaunch




Round 3: YieldRound 3: YieldDrought Stress Tolerance Is One of Potential New Drought Stress Tolerance Is One of Potential New Agronomic Traits in PipelineAgronomic Traits in Pipeline

GenomicsGenomics





22 2004 Field Trial Update2004 Field Trial UpdateTwo gene leads obtained positive results with more than one transformed event

0

5

10

15

20

25

30

35

Event One Event Two Event Three

Yield Increase (bu/acre)

Performance of 3 Events (Gene 1)

0

2

4

6

8

10

12

14

16

18

Event One Event Two Event Three

Yield Increase (bu/acre)

Performance of 3 Events (Gene 2)

33

SummarySummary

Value Shift to Seed Continues…Value Shift to Seed Continues…

Source: U.S. 1996Source: U.S. 1996--2003 Doane AgroTrak & Seed Studies; 2008 Monsanto Estimate2003 Doane AgroTrak & Seed Studies; 2008 Monsanto Estimate

Crop ChemicalsCrop Chemicals GermplasmGermplasm Biotech TraitsBiotech Traits

$4.5$4.5

$3.0$3.0

$0.1$0.1

1996 1996 $7.5 Billion$7.5 Billion

$3.6$3.6

$3.5$3.5 $1.3$1.3

20032003$8.4 Billion$8.4 Billion

$2.6$2.6$3.8$3.8

$2.7$2.7

2008F 2008F $9.2 Billion$9.2 Billion

Industry value shift from crop chemicals to Industry value shift from crop chemicals to seeds and traits is well under wayseeds and traits is well under way

34

SummarySummary

…to Food, Feed and Yield…to Food, Feed and Yield

SeedSeed

CropChemicals

CropCropChemicalsChemicals Value ShiftValue ShiftValue Shift

AnimalNutritionAnimalAnimal

NutritionNutrition Value ShiftValue ShiftValue Shift

HumanHealthHumanHumanHealthHealth Value ShiftValue ShiftValue Shift

Water and Soil

Nutrients

Water and Water and Soil Soil

NutrientsNutrientsValue ShiftValue ShiftValue Shift

35

Questions?Questions?

monsanto 200412/08

Economy & Finance

nongaap eps financial

companys ability

companys filings

presentation of eps

comparable financial

companys research

companys exposure

financial position