monsanto monmouth2

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Momentum in the FieldMomentum in the Field

Carl Carl CasaleCasale

August 30, 2004August 30, 2004

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ForwardForward--Looking StatementsLooking StatementsCertain statements contained in this presentation, such as stateCertain statements contained in this presentation, such as statements concerning the company's anticipated financial ments concerning the company's anticipated financial results, current and future product performance, regulatory apprresults, current and future product performance, regulatory approvals, currency impact, business and financial plans and ovals, currency impact, business and financial plans and other nonother non--historical facts are "forwardhistorical facts are "forward--looking statements." These statements are based on current expeclooking statements." These statements are based on current expectations and tations and currently available information. However, since these statementscurrently available information. However, since these statements are based on factors that involve risks and are based on factors that involve risks and uncertainties, the companyuncertainties, the company’’s actual performance and results may differ materially from thoss actual performance and results may differ materially from those described or implied by e described or implied by such forwardsuch forward--looking statements. Factors that could cause or contribute to sulooking statements. Factors that could cause or contribute to such differences include, among others: the ch differences include, among others: the companycompany’’s exposure to various contingencies, including those related to s exposure to various contingencies, including those related to Solutia, Inc., litigation, intellectual property, Solutia, Inc., litigation, intellectual property, regulatory compliance (including seed quality), environmental coregulatory compliance (including seed quality), environmental contamination and antitrust; fluctuations in exchange rates ntamination and antitrust; fluctuations in exchange rates and other developments related to foreign currencies and economiand other developments related to foreign currencies and economies; increased generic and branded competition for the es; increased generic and branded competition for the company's Roundup herbicide; the accuracy of the companycompany's Roundup herbicide; the accuracy of the company’’s estimates and projections, for example, those with respect s estimates and projections, for example, those with respect to product returns and grower use of our products and related dito product returns and grower use of our products and related distribution inventory levels; the effect of weather stribution inventory levels; the effect of weather conditions and commodity markets on the agriculture business; thconditions and commodity markets on the agriculture business; the success of the companye success of the company’’s research and s research and development activities and the speed with which regulatory authodevelopment activities and the speed with which regulatory authorizations and product launches may be achieved; rizations and product launches may be achieved; domestic and foreign social, legal and political developments, edomestic and foreign social, legal and political developments, especially those relating to agricultural products specially those relating to agricultural products developed through biotechnology; the company's ability to contindeveloped through biotechnology; the company's ability to continue to manage its costs; the companyue to manage its costs; the company’’s ability to s ability to successfully market new and existing products in new and existinsuccessfully market new and existing products in new and existing domestic and international markets; the companyg domestic and international markets; the company’’s s ability to obtain payment for the products that it sells; the coability to obtain payment for the products that it sells; the company's ability to achieve and maintain protection for its mpany's ability to achieve and maintain protection for its intellectual property; the effects of the company's accounting pintellectual property; the effects of the company's accounting policies and changes in generally accepted accounting olicies and changes in generally accepted accounting principles; the company's ability to fund its shortprinciples; the company's ability to fund its short--term financing needs; general economic and business conditions; term financing needs; general economic and business conditions; political and economic conditions due to threat of future terrorpolitical and economic conditions due to threat of future terrorist activity and related military action; and other risks and ist activity and related military action; and other risks and factors detailed in the company's filings with the U.S. Securitifactors detailed in the company's filings with the U.S. Securities and Exchange Commission. Undue reliance should not es and Exchange Commission. Undue reliance should not be placed on these forwardbe placed on these forward--looking statements, which are current only as of the date of thilooking statements, which are current only as of the date of this release. The company s release. The company disclaims any current intention to revise or update any forwarddisclaims any current intention to revise or update any forward--looking statements or any of the factors that may affect looking statements or any of the factors that may affect actual results, whether as a result of new information, future eactual results, whether as a result of new information, future events or otherwise.vents or otherwise.

ForwardForward--Looking StatementsLooking Statements

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Biotechnology Is Most Rapidly Adopted Technology in Biotechnology Is Most Rapidly Adopted Technology in the History of Agriculturethe History of Agriculture

Global Monsanto Planted Biotech AcresGlobal Monsanto Planted Biotech AcresAcres in millionsAcres in millions

Source: Monsanto estimatesSource: Monsanto estimates

0

20

40

60

80

100

120

140

160

180

1996

1997

1998

1999

2000

2001

2002

2003

2004 P

relim

inary

Canola

Cotton

Corn

Soybeans

Round 1: FirstRound 1: First--Generation TraitsGeneration Traits

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Source: Source: ““Plant Biotechnology: Current and Potential Impact for Improving Plant Biotechnology: Current and Potential Impact for Improving Pest Management in U.S. Pest Management in U.S. Agriculture,Agriculture,”” Leonard P. Leonard P. GianessiGianessi, National Center for Food & Agriculture Policy. , National Center for Food & Agriculture Policy.

Effect of Biotech Crops on U.S. Pesticide UseEffect of Biotech Crops on U.S. Pesticide Usein 2001in 2001

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

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

(1)(1)CanolaCanola

(8)(8)CottonCotton

(8)(8)CornCorn

(29)(29)SoybeansSoybeans

Million Million LbsLbs


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Early, Major Investment In Seeds Captured Value ShiftEarly, Major Investment In Seeds Captured Value ShiftRound 1: Seed BreedingRound 1: Seed Breeding

Licensed ShareLicensed ShareBrand ShareBrand Share

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

Source: MonsantoSource: Monsanto

45% 48% 49%43%

0%10%20%30%40%50%60%

2001 2002 2003 2004Preliminary

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0

20

40

60

80

100

Soybea

n traits

Cotton t

raits

Corn tra

itsLibert

y Link c

orn

Clearfie

ld IMI c

ornHerc

ulex c

orn

Source: MonsantoSource: Monsanto

Percentage of 2004 U.S. total planted acresPercentage of 2004 U.S. total planted acres(Preliminary)(Preliminary)

Early Biotech Portfolio Success Has Provided Unique Early Biotech Portfolio Success Has Provided Unique Industry InsightsIndustry Insights

Competitive productsCompetitive products

Monsanto productsMonsanto products


7Source: Monsanto and Source: Monsanto and Doane Doane Market ResearchMarket Research

Roundup Ready Soybeans Deliver Superior Weed Roundup Ready Soybeans Deliver Superior Weed Control at Competitive System CostControl at Competitive System Cost

Unmatched weed control in Roundup Ready SoybeansUnmatched weed control in Roundup Ready Soybeans

$48$48$40$40

19951995 20032003

$ per acre$ per acreHerbicideHerbicideSeedSeed

U.S. Grower System CostU.S. Grower System CostRoundup Ready SoybeansRoundup Ready Soybeans

Herbicide Herbicide CostCost

Trait Trait CostCost


19991999

Roundup ReadyRoundup Ready

$52$52

TraitTrait

ConventionalConventional

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Yieldgard Rootworm Continues High Satisfaction Yieldgard Rootworm Continues High Satisfaction Pattern with Biotech TraitsPattern with Biotech Traits


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 to answer very satisfied, somewhat satisfied, neutral, or not satisfied.satisfied, neutral, or not satisfied.*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**

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

YieldgardYieldgardCornCorn

Borer*Borer*

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Market Potential for Biotech Traits Highlights Continued Market Potential for Biotech Traits Highlights Continued Growth OpportunityGrowth Opportunity

Total Available Market in AcresTotal Available Market in Acres

Biotech Biotech Acres Acres Planted 2004 Planted 2004 PreliminaryPreliminaryRemaining Remaining Available Available MarketMarket

64%64%64% 21%21%21% 61%61%61% 8%8%8%66%66%66% 26%26%26%


CornCornCottonCottonSoybeansSoybeans

------0.5M0.5M--0.8M0.8M0.5M0.5M--0.8M0.8M--AustraliaAustralia

------1010--15M15M----IndiaIndia

1M1M4M4M5M5M----30M30MArgentinaArgentina

5M5M15M15M20M20M----50M50MBrazilBrazil

1515--20M20M30M30M--40M40M20M20M--50M50M66--8M8M1010--15M15M70M70MUnited StatesUnited States

YieldGard YieldGard RootRoot--wormworm

YieldGard YieldGard Corn Corn BorerBorer

Roundup Roundup ReadyReady

Bollgard I Bollgard I and IIand II



Key MarketsKey Markets

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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 PotentialMarket 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

CornCorn

* Monsanto Traits Only* Monsanto Traits Only

U.S. Biotech Margin Opportunities U.S. Biotech Margin Opportunities –– 2004 Preliminary*2004 Preliminary*

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Upgrades in Technology Raise the Bar on CompetitionUpgrades in Technology Raise the Bar on Competition----Roundup Ready Flex CottonRoundup Ready Flex CottonProductProduct•• Roundup Ready Flex offers a Roundup Ready Flex offers a wider window of Roundup wider window of Roundup application with higher use rates application with higher use rates and enhanced crop safetyand enhanced crop safety

Available MarketAvailable Market•• 1010--15 million acre upgrade in U.S15 million acre upgrade in U.S•• 0.50.5--0.8 million acre upgrade in 0.8 million acre upgrade in AustraliaAustralia

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

Emergence Layby Preharvest Harvest

Over-the-top window of applicationRoundup Ready® Flex Cotton

Roundup Ready®

Cotton(< 4 lf.)

Value ConsiderationsValue Considerations•• Incremental pricing opportunity over Incremental pricing opportunity over current Roundup Ready cottoncurrent Roundup Ready cotton

•• Stack with Bollgard II enhances margin Stack with Bollgard II enhances margin opportunityopportunity

StatusStatus•• Phase 3 of Phase 3 of developmentdevelopment

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Market NeedMarket NeedTrans fat labeling on foods Trans fat labeling on foods mandated by FDA in 2006mandated by FDA in 2006

FeaturesFeaturesLinolenic acid < 3%Linolenic acid < 3%A more stable soy oil A more stable soy oil requiring less requiring less hydrogenation: hydrogenation: reduce/eliminate trans fatsreduce/eliminate trans fatsBetter flavor profile Better flavor profile Full agronomic and yield Full agronomic and yield performance performance

FirstFirst--Generation Output Trait ApproachingGeneration Output Trait Approaching——Low Low LinolenicLinolenic SoySoy

Product Product

Technical StatusTechnical Status•• 2005 prototype testing2005 prototype testing•• 2006 commercial launch2006 commercial launch

Likely UsesLikely Uses

•• Substitute for hydrogenated oil Substitute for hydrogenated oil and blends for low trans and blends for low trans solutionssolutions

Std SoybeanStd Soybean

Low Lin SoyLow Lin Soy

SatsSatsLinolenicLinolenic

18:318:3 OleicOleicLinoleicLinoleic

Round 3: Food TraitsRound 3: Food Traits

“Food manufacturers are “Food manufacturers are scrambling to eliminate trans fat scrambling to eliminate trans fat from their products” from their products” Harvard Health WatchHarvard Health Watch

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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

YieldGard YieldGard Rootworm Rootworm

CornCorn

YieldGard YieldGard Corn BorerCorn Borer

Bollgard I & II Bollgard I & II CottonCotton

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

Commercialized Agronomic TraitsCommercialized Agronomic Traits

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

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)

monsanto monmouth2

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