2. OVERVIEW
Annual Pipeline Update Signals Pipeline Momentum Is
Accelerating
ANNUAL R&D CYCLE: SEEDS & TRAITS FULL-YEAR PIPELINE UPDATE
BIOTECH TRAIT PIPELINE
PIPELINE PROGRESS
7 projects either advanced from one phase to another
or were added to the pipeline, representing positive
movement in >20% of the active R&D pipeline
PIPELINE ADDITION
2 projects were added to Phase I or later as a result of
Q1 Q4 discovery work or collaborative partnerships
PIPELINE PROGRESS IN PHASE
All projects that have not advanced phases passed
Q2 Q3 key milestones within phase, maintaining momentum
BREEDING PIPELINE
CORN BREEDING
More than 49,000 trials establish the yield advantage
in our national brands, and we increased our overall
advantage in the widely planted 110-day corn to a
record 11.7 bushels per acre
SOYBEAN BREEDING
JULY-AUGUST Break-out strategy in soybeans works to continue
MID-YEAR PIPELINE UPDATE
advanced screening capabilities and molecular-
Project reviews, including data reviews
breeding-based selection
and updates from field research both
inside and outside the U.S.
8
3. OVERVIEW
Two-Year View Demonstrates Increased Breadth and Depth
of Monsanto’s Pipeline
R&D PIPELINE: JANUARY 2007
PHASE PHASE PHASE PHASE
PHASE PHASE PHASE PHASE
D
D 1 2 3 4
1 2 3 4
PROCESSOR BENEFITS
FARMER BENEFITS
MAVERA™ HIGH-VALUE CORN
ROUNDUP READY FLEX COTTON
WITH LYSINE1
ROUNDUP RREADY2YIELD SOYBEANS
MAVERA™ I HIGH-VALUE SOYBEANS1
ROUNDUP RREADY2YIELD CANOLA
MAVERA™ II HIGH-VALUE SOYBEANS1
DICAMBA-TOLERANT SOYBEANS
2nd-GEN HIGH-VALUE CORN WITH
LYSINE1
DICAMBA-TOLERANT COTTON
FEED CORN WITH BALANCED
PROTEINS1
YIELDGARD VT ROOTWORM/RR2
2ND-GEN YIELDGARD ROOTWORM
HIGH OIL SOYBEANS FOR
PROCESSING1
YIELDGARD VT PRO
2ND-GEN YIELDGARD CORN BORER
CONSUMER BENEFITS
INSECT-PROTECTED SOYBEANS
YIELDGARD ROOTWORM II IMPROVED-PROTEIN SOYBEANS
SOYBEAN NEMATODE-RESISTANCE VISTIVE II SOYBEANS
BOLLGARD III VISTIVE III SOYBEANS
COTTON LYGUS CONTROL OMEGA-3 SOYBEANS
HYBRIDIZATION SYSTEM FOR CORN
DROUGHT-TOLERANT CORN
2ND-GEN DROUGHT-TOLERANT CORN High Impact Technologies (HIT) project
HIGHER-YIELDING CANOLA
Jan. 4, 2007 Advancements/Additions
WATER-USE EFFICIENCY SOYBEANS
Jan. 4, 2006 Advancements/Additions
DROUGHT-TOLERANT COTTON
1. These product candidates are in the Renessen pipeline. Renessen is a
HIGHER-YIELDING CORN
Monsanto/Cargill joint venture.
NITROGEN UTILIZATION CORN
2. The colored bar associated with each project indicates which phase that project is
HIGHER-YIELDING SOYBEANS in. It is not intended to represent the relative status of the project within a particular
stage.
9
4. PIPELINE UPDATE
Roundup RReady2Yield Soybeans Advance to Phase 4,
Beginning Pre-Launch Activities
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Roundup RReady2Yield AVAILABLE MARKET 70M 60M 35M
Soybeans PERCENT PENETRATED 0% 0% 0%
P R O JE CT
2006 TESTING: RELATIVE PERFORMANCE OF ROUNDUP READY AND
R&D Pipeline
ROUNDUP RREADY2YIELD EXPERIMENTAL LINES
Roundup RReady2Yield Soybeans
PROJECT CONCEPT:
PERCENT OF POPULATION
50
Second-generation of Monsanto’s popular ROUNDUP READY
ROUNDUP
herbicide-tolerant platform in soybeans EXPERIMENTAL
RREADY2YIELD
LINES
40
that will provide farmers with soybeans that EXPERIMENTAL LINES
have enhanced yield, with a target of up to
30
5 bushel-per-acre yield increase over
comparable Roundup Ready soybeans
KEY RESULTS
20
2006 PERFORMANCE UPDATE:
Phase 4 10
2006 STATUS:
• Performance indicates that the
enhanced yields associated with -10 -5 0 5 10 15
Roundup RReady2Yield are
YIELD DIFFERENCE (BU/AC)
consistent across multiple years
and diverse germplasm 2006 breeding trials compared Roundup RReady2Yield
backgrounds experimental lines with Roundup Ready experimental lines that
were in the same stage of development. The Roundup
VALUE CATEGORIES:
RReady2Yield lines averaged 3 to 5 bushels per acre higher than
RETAIL
Roundup Ready experimental lines – shifting the entire yield
$10 - $30/acre
VALUE/ACRE:
curve positively and providing further validation for the product
TOTAL ACRE concept target of up to a 5 bushel-per-acre yield increase
>20M acres
OPPORTUNITY:
10
5. PIPELINE UPDATE
Vistive III Soybeans Continue To Meet or Exceed
Commercial Targets
KEY MARKET ACRES U.S.
AVAILABLE MARKET 12-15M
Vistive III Soybeans PERCENT PENETRATED 0%
P R O JE CT
2006 TESTING: LEAD EVENTS WITH TARGET OIL COMPOSITION
IDENTIFIED
R&D Pipeline
OLEIC AND SATURATED FATTY ACIDS
Vistive III Soybeans
U.S. FIELD DATA 2006 – 6-10 LOCATIONS
80
PROJECT CONCEPT:
70
Combining both breeding and
60
biotechnology, Vistive III is designed to
lower linolenic and saturate content while 50
% FATTY ACID
boosting oleic content for a profile similar
40 PRODUCT
KEY RESULTS
to olive oil CONCEPT
TARGET RANGES
30
2006 PERFORMANCE UPDATE:
20
Phase 2
2006 STATUS:
10
• Phase 2 testing for oil traits
0
focuses on replicating oil-profile
CONTROL EVENT 1 EVENT 2 EVENT 3
targets
• 2006 testing allowed for lead OLEIC ACID SATURATES
selection with multiple events
hitting oil-profile targets In 2006 field testing, multiple events met product concept
VALUE CATEGORIES: composition of 55-75% oleic and <7% saturates. Selection of
leads is actively under way
RETAIL
$10 - $30/acre
VALUE/ACRE:
TOTAL ACRE
5M - 20M acres
OPPORTUNITY:
11
6. PIPELINE UPDATE
First of Drought-Tolerant Corn Traits Continues To
Deliver Yield Boost in Third-Year Testing
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
AVAILABLE MARKET 80M 30M 6M
Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0%
P R O JE CT
2006 TESTING: YIELD IMPROVEMENT OF LEAD EVENT UNDER DROUGHT
STRESS
R&D Pipeline Percent yield difference vs. control
14 7.3% 10.5% 10.9% 23.2% 9.0% In third year field
Drought-Tolerant Corn
12
VS. CONTROL (BU/ACRE)
testing in U.S.,
PROJECT CONCEPT:
KEY RESULTS
YIELD DIFFERENCE
10 drought-tolerant
leads are
First-generation drought tolerance is 8
NOT TESTED
consistently
targeted to minimize uncertainty in farming
6
delivering higher
by buffering against the effects of water
4
limitation, primarily in areas of annual water yields compared
stress with controls
2
2006 PERFORMANCE UPDATE: under drought-
0
stressed
2004 2005 2006
Phase 2
2006 STATUS:
conditions
Hybrid 1: 2004, 4 locations; 2005 5 locs; 2006, 1 loc (20 reps)
Hybrid 2: 2004, not tested; 2005, 5 locs, 2006, 3 locs
• Yield enhancement demonstrated
again in 2006 under water-stress SEGMENTED VALUE OPPORTUNITY ACROSS MARKETS
conditions in U.S.
First leads show
KEY OPPORTUINITY
• Lead gene chosen primary benefit under
IRRIGATED
• 2007 trials expected to demonstrate water-stress
yield enhancement in multiple conditions
WESTERN
hybrids under dryland conditions DRYLAND
First product
VALUE CATEGORIES: targeted at western
STABILITY
dryland market
RETAIL
$10 - $30/acre
VALUE/ACRE:
Low annual High annual
TOTAL ACRE
>20M acres precipitation precipitation
OPPORTUNITY:
Source: Spatial Climate Analysis Service, Oregon State University
12
7. PIPELINE UPDATE
Second-Generation Drought-Tolerant Corn Already
Populated with Strong Leads
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Second-Generation AVAILABLE MARKET 80M 30M 6M
Drought-Tolerant Corn PERCENT PENETRATED 0% 0% 0%
2006 TESTING: YIELD IMPROVEMENT IDENTIFIED IN SECOND-GENERATION
OF GENE CONSTRUCTS
R&D Pipeline
Second-Generation Drought-
30%
Tolerant Corn
25%
PROJECT CONCEPT:
% YIELD INCREASE
Second-generation products aimed at 20%
boosting yield stability for broad-acre
applications and reducing water input 15%
required in water-limited environments
KEY RESULTS
10%
2006 PERFORMANCE UPDATE:
5%
Phase 1
2006 STATUS:
0%
• Phase 1 testing focused on field-
level proof of concept to identify
1 2 3 4 5
potential leads for commercial
LEAD CONSTRUCTS
transformations
VALUE CATEGORIES: Different events for each lead
RETAIL
Field screening is used to identify new gene candidates that
$10 - $30/acre
VALUE/ACRE:
address water use efficiency for areas of water-stress and in
TOTAL ACRE
broad-acre applications. In 2006, multi-location testing
>20M acres
OPPORTUNITY:
identified both several leads and several events within those
leads with significant yield advantages
13
8. PIPELINE UPDATE
Drought-Tolerance Is a Cross-Crop Platform, Spanning
Corn, Soybeans and Cotton
Drought-Tolerant Platform
DROUGHT-TOLERANT COTTON
R&D Pipeline
Drought-Tolerant Platform
PROJECT CONCEPT:
WITH GENE
The platform is targeted to minimize uncertainty in farming by
buffering against the effects of water limitation, in environments
ranging from consistent water stress to areas that experience sub-
optimal rainfall sporadically
PLATFORMS:
D 1 2 3 4
CORN
Drought-Tolerant Corn
CONTROL
2nd-Gen Drought-Tolerant Corn
SOYBEANS
Water-Use Efficiency Soybeans
COTTON In second-year field trials, plants with
drought-tolerant genes showed better
Drought-Tolerant Cotton
performance, reflecting a fuller canopy and
less wilting than conventional checks
14
9. PIPELINE UPDATE
After Three Years of Solid Field Data, Higher-Yielding
Corn Enters Phase 2 Development
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
AVAILABLE MARKET 80M 30M 6M
Higher-Yielding Corn PERCENT PENETRATED 0% 0% 0%
2006 TESTING: 2006 FIELD RESULTS INDICATE INCREASED YIELD VERSUS
CONVENTIONAL CHECKS
R&D Pipeline
10
PERCENT YIELD INCREASE
Higher-Yielding Corn
PROJECT CONCEPT:
8 PRODUCT
15.5
OVER CHECK
Higher-yielding corn is aimed at boosting CONCEPT
BU/AC
TARGET
the intrinsic yield potential of corn hybrids
13.7
6 RANGE
through insertion of key genes
BU/AC
12.1
2006 PERFORMANCE UPDATE: BU/AC
4
Phase 2
2006 STATUS:
KEY RESULTS
2
• With 3 years of field data proving
efficacy, Higher-Yielding Corn
0
emerged from proof-of-concept
testing to Phase 2 development HYBRID 1 HYBRID 2 HYBRID 3
• Commercial transformations will
be made, with further testing to
In 2006 field testing, lead event shows yield efficacy in different
select for lead events
test hybrids. Three years of data demonstrate yield increases in
VALUE CATEGORIES: multi-location trials with multiple hybrid combinations
RETAIL
$10 - $30/acre
VALUE/ACRE:
TOTAL ACRE
> 20M acres
OPPORTUNITY:
15
10. PIPELINE UPDATE
2006 Testing Confirmed Leads from 2005 and Identified
Stable of New Genes for Nitrogen Efficiency
KEY MARKET ACRES U.S. BRAZIL EUROPE
AVAILABLE MARKET 80M 30M 24M
Nitrogen Utilization PERCENT PENETRATED 0% 0% 0%
Corn
2006 TESTING: 2006 FIELD RESULTS CONFIRM CONTINUED
R&D Pipeline PERFORMANCE OF LEADS IDENTIFIED IN 2005
Nitrogen Utilization Corn LEAD NITROGEN UTILIZATION GENE
(ACROSS 3 LOCATIONS: ILLINOIS AND IOWA)
PROJECT CONCEPT:
175
Targets ways that corn plants can use
nitrogen more efficiently, exploring the
170
potential to boost yield under normal
nitrogen conditions or stabilize yield in low 165 EVENT 1
YIELD PER ACRE
nitrogen environments
EVENT 2
160
2006 PERFORMANCE UPDATE:
KEY RESULTS
CONTROL
155
Phase 1
2006 STATUS:
150 Reduction in
• Second year proof-of-concept Applied Nitrogen
145
testing confirmed 2005 lead genes
140
across multiple locations and
0 40 80 180
nitrogen rates and added new
gene candidates for further testing NITROGEN INPUT: LBS/ACRE
VALUE CATEGORIES:
RETAIL
Reading right to left, what scientists will look for to
$10 - $30/acre
VALUE/ACRE:
establish proof of concept is when nitrogen application
TOTAL ACRE
is decreased, the total yield per acre remains stable. In
> 20M acres
OPPORTUNITY:
2006 data, the 2 events show no yield drop off as the
nitrogen application levels decrease from 180 lbs/ac to
40 lbs/ac
16
11. PIPELINE UPDATE
Renessen™ High-Oil Soybeans Advance to Phase 3
Testing After Strong 2006 Results
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Renessen™ High-Oil
AVAILABLE MARKET 15-20M 20-25M 7-10M
Soybeans
PERCENT PENETRATED 0% 0% 0%
2006 TESTING: MULTI-YEAR TESTING FOR HIGHER OIL CONTENT
R&D Pipeline
Percent oil difference vs. control
23 1.4% 1.5%
1.7% 1.6%
Renessen™ High-Oil Soybeans
PROJECT CONCEPT:
OIL PERCENTAGE
22
Targeted to improve oil crushing yield
2006 PERFORMANCE UPDATE: 21
Phase 3
2006 STATUS:
20
KEY RESULTS
• Phase 2 testing for oil traits
focused on replicating oil-profile 19
targets
• 2006 testing demonstrated 18
consistent, significant oil
U.S. 2004 ARGENTINA U.S. 2005 U.S. 2006
advantage, advancing into Phase
2004
3 for further commercial
(6 LOCATIONS) (11 LOCATIONS) (14 LOCATIONS) (19 LOCATIONS)
development
VALUE CATEGORIES: WITH GENE WITHOUT GENE
RETAIL
<$10/acre
VALUE/ACRE:
TOTAL ACRE In four seasons of testing, significant oil yield advantage has been
>20M acres
OPPORTUNITY: shown with high-oil gene
17
12. PIPELINE UPDATE
Molecular Breeding Increasing Performance Benefit in
Soybeans Versus Competitors
Soybean Breeding
SOYBEAN BREEDING: 2006 U.S. COMPETITIVE SOYBEAN YIELD
R&D Pipeline
Soybean Breeding
60
PLATFORM CONCEPT: ASGROW / DEKALB
58
Monsanto is using the most COMPETITORS
BUSHELS/ACRE
56
advanced tools of genomics,
molecular markers and IT resources 54
to more efficiently select for the 52
best base germplasm for soybeans 50
2006 PERFORMANCE UPDATE: 48
• Yield data from 2006 indicates 46
continued yield advantage for
44
national brands versus best-in-
42
class competitors
40
4 5
0 1 2 3
RELATIVE MATURITIES
YIELD ADVANTAGE
In 2006, Monsanto demonstrated a yield advantage
compared with the best-in-class competitors in all of
the major U.S. maturity zones
18
13. PIPELINE UPDATE
Best-in-Class Corn Breeding Capability Being Leveraged
Across Commercial Channels
Corn Breeding
CORN BREEDING: 2006 U.S. COMPETITIVE CORN YIELD
R&D Pipeline
200
DEKALB
Corn Breeding
PLATFORM CONCEPT: COMPETITORS
195
Monsanto is using the most
BUSHELS/ACRE
advanced tools of genomics, 190
molecular markers and IT resources
to more efficiently select for the 185
best base germplasm for corn
2006 PERFORMANCE UPDATE: 180
• Yield data from 2006 indicates
175
continued yield advantage for
national brands versus best-in-
170
class competitors RELATIVE MATURITIES
115
95 100 105 (DAYS)
• 2006 represented the fifth straight
110
year of market share gains in
Monsanto’s Asgrow and DEKALB
YIELD ADVANTAGE
national brands
In 2006, across the 110-day maturity zone that
covers one-third of U.S. corn production,
DEKALB outperformed the competition by 11.7
bushels per acre on average
19
14. SUMMARY
Volume and Velocity Accelerates Across Pipeline,
Expanding Monsanto’s Leadership Opportunity
ANNUAL R&D CYCLE: SEEDS & TRAITS TWO-YEAR PIPELINE UPDATE
BIOTECH TRAIT PIPELINE
PIPELINE PROGRESS
More than 70% of the projects advanced from one
phase to another with the most significant being our
Roundup RReady2Yield HIT project
PIPELINE ADDITION
Almost 30% of the pipeline represents additions to
Q1 Q4 Phase I or later as a result of discovery work or
collaborative partnerships
PIPELINE PROGRESS IN PHASE
Q2 Q3 All projects that have not advanced phases passed
key milestones within phase, maintaining momentum
BREEDING PIPELINE
CORN BREEDING
Leadership in corn breeding solidified, and we’ve
seen yield gains in national brands, American Seeds,
Inc. companies, and in the germplasm for Holden’s
licensees
SOYBEAN BREEDING
JULY-AUGUST
MID-YEAR PIPELINE UPDATE
Break-out strategy in soybeans unveiled combining
Project reviews, including data reviews
and updates from field research both advanced screening capabilities and molecular-
inside and outside the U.S. breeding-based selection
20
