1. ROBERT T. FRALEY, PH.D.
Chief Technology Officer and Executive Vice President
MYSTIC RESEARCH FACILITY
INVESTOR PRESENTATION
January 2005
1
2. Forward-Looking Statements
Certain statements contained in this presentation, such as statements concerning the company's anticipated
financial results, current and future product performance, regulatory approvals, currency impact, business and
financial plans and other non-historical facts are quot;forward-looking statements.quot; These statements are based on
current expectations and currently available information. However, since these statements are based on factors that
involve risks and uncertainties, the company’s actual performance and results may differ materially from those
described or implied by such forward-looking statements. Factors that could cause or contribute to such
differences include, among others: the company's exposure to various contingencies, including those related to
Solutia Inc., litigation, intellectual property, regulatory compliance (including seed quality), environmental
contamination and antitrust; fluctuations in exchange rates and other developments related to foreign currencies
and economies; increased generic and branded competition for the company's Roundup herbicide; the accuracy of
the company’s estimates and projections, for example, those with respect to product returns and grower use of our
products and related distribution inventory levels; the effect of weather conditions and commodity markets on the
agriculture business; the success of the company’s research and development activities and the speed with which
regulatory authorizations and product launches may be achieved; domestic and foreign social, legal and political
developments, especially those relating to agricultural products developed through biotechnology; the company’s
ability to successfully market new and existing products in new and existing domestic and international markets;
the company’s ability to obtain payment for the products that it sells; the company's ability to achieve and maintain
protection for its intellectual property; the effects of the company's accounting policies and changes in generally
accepted accounting principles; the company's ability to fund its short-term financing needs; general economic and
business conditions; political and economic conditions due to threat of future terrorist activity and related military
action; and other risks and factors detailed in the company's filings with the U.S. Securities and Exchange
Commission. Undue reliance should not be placed on these forward-looking statements, which are current only as
of the date of this release. The company disclaims any current intention to revise or update any forward-looking
statements or any of the factors that may affect actual results, whether as a result of new information, future events
or otherwise.
The trademarks identified in italics in this presentation are owned by Monsanto Company and its wholly-owned subsidiaries.
2
3. We Track the Next Generation of Products
Through the Pipeline
The heart of Monsanto’s research and development is our product pipeline. Our pipeline is
an engine for discovering and developing the next generation of commercial products. We
take our ideas through five phases — from early discovery work through four
pre-commercial preparation stages.
The pipeline product examples in this section are shown in reverse chronological order,
beginning with the products that are closest to potential commercial launch and tracking deeper
into the research phases.
We sort projects in the pipeline in categories by those that offer benefits to farmers,
processors or consumers.
Farmer benefits are those that increase productivity or reduce cost by increasing yield,
improving protection from weeds, insects and disease, or increasing tolerance to heat, drought,
and other stress.
Processor benefits create better value in food and feed nutrition for food and feed
processors.
Consumer benefits are advantages such as increased protein, improved oils, improved
fatty-acid balance, or carbohydrate enhancements that help make food healthier for consumers.
3
4. Pipeline Phases
PHASE IV
PHASE II
PHASE I PHASE III
DISCOVERY
Pre-Launch
Early Development
Proof of Concept Adv. Development
For conventional Demonstrate the Produce bulk seed for
For conventional
This is where R&D
breeding products, performance of the potential sale.
breeding, we conduct
begins. We conduct
we breed plants from hybrid or variety
field trials of plants
high-throughput
parents with desired developed through
bred from parents
screening of genetic Develop plans for
traits. conventional breeding;
with the desired traits.
databases to identify commercialization.
or
valuable plant traits to
be used in conventional For biotechnology Demonstrate the
For biotechnology Respond
breeding and valuable products, we test efficacy of a
products, we conduct to regulatory processes
genes that can be used gene configurations in biotechnology trait in
lab and field-testing of as appropriate.
to improve plants plants to screen for elite germplasm.
genes in plants to
through biotechnology. desired performance. select the product
candidates that can Develop and submit
be commercialized
We apply screens to We determine which regulatory data as
and can meet
broad categories of leads show the most appropriate
regulatory
interest, identifying promise for
requirements.
multiple leads that are application to target
then investigated. plants.
AVERAGE AVERAGE
AVERAGE AVERAGE
AVERAGE
DURATION DURATION
DURATION DURATION
DURATION
24 to 48 months 12 to 24 months 12 to 24 months 12 to 36 months
12 to 24 months
AVERAGE AVERAGE AVERAGE AVERAGE
AVERAGE
PROBABILITY PROBABILITY PROBABILITY PROBABILITY
PROBABILITY
OF SUCCESS OF SUCCESS OF SUCCESS OF SUCCESS
OF SUCCESS
5 percent 25 percent 75 percent 90 percent
50 percent
4
Time estimates are based on our experience; total development time for any particular product can be shorter or longer than the time estimates here
5. Our Technology Platforms
Monsanto uses its scientific capabilities in a number of arenas to develop
new products. These capabilities form a toolkit used throughout our
product pipeline, as each tool can be used on its own or in combination to
help study, test and refine new traits, germplasm and other characteristics
in plants.
Genomics involves the mapping of the genes of plants to understand their structure
GENOMICS
and the role they play in how the plant functions.
Conventional breeding is the process of cross-pollinating plants with desirable
CONVENTIONAL
BREEDING qualities to develop improved plants in successive generations
Molecular breeding involves the use of DNA markers for genes in combination with
MOLECULAR physical measurement of traits to manage plant breeding programs. Molecular
BREEDING breeding significantly accelerates the efficiency in bringing new varieties to market.
Crop analytics involves the application of advanced analytical methods and
technologies to identify the composition of food and feed traits.
CROP ANALYTICS
Biotechnology is the application of scientific knowledge to transfer beneficial genetic
BIOTECHNOLOGY traits to enhance plants’ growth or to provide nutritional or other benefits to farmers,
food and feed processors, or consumers.
5
6. Products Launched
Y
D
R
E
E
2
3
4
1
H
V
C
E
E
E
Farmer Benefits
E
O
N
S
S
S
S
C
A
A
A
A
U
IS
H
H
H
H
LA
D
P
P
P
P
SOYBEANS
Roundup Ready Soybeans 1996
CANOLA
1999
Roundup Ready Canola
COTTON
1997
Roundup Ready Cotton
1996
Bollgard Insect-Protected Cotton
2003
Bollgard II Insect-Protected Cotton
1997
Bollgard and Roundup Ready Cotton
CORN
1998
Roundup Ready Corn
2001
Roundup Ready Corn 2
1997
YieldGard Corn Borer Insect-Protected Corn
2003
YieldGard Rootworm Insect-Protected Corn
2004
YieldGard Plus
2005
YieldGard Plus with Roundup Ready
1998
YieldGard Corn Borer with Roundup Ready
2003
YieldGard Rootworm with Roundup Ready
GENOMICS CONVENTIONAL MOLECULAR CROP ANALYTICS BIOTECHNOLOGY
BREEDING BREEDING
6
7. Product Pipeline
Y
R
E
2
3
4
1
H
V
C
E
E
E
Farmer Benefits
E
O
N
S
S
S
S
C
A
A
A
A
U
IS
H
H
H
H
LA
D
P
P
P
P
Roundup Ready Flex Cotton 2006
Pending
Second-generation Roundup Ready/
Regulatory
YieldGard Rootworm Corn Approval
Breeding: Elite germplasm
Second-generation YieldGard
Corn Borer
Second-generation Roundup Ready
Soybeans
Drought-tolerant corn
Drought-tolerant soybeans
Drought-tolerant cotton
Higher-yielding corn
Higher-yielding soybeans
DISCOVERY PLATFORMS
Grain yield
Environmental stress tolerance
Insect control
Roundup Ready herbicide tolerance
Disease resistance
GENOMICS CONVENTIONAL MOLECULAR CROP ANALYTICS BIOTECHNOLOGY
BREEDING BREEDING
7
8. Product Pipeline
Y
R
E
2
3
4
1
H
V
C
E
E
E
Processor Benefits
E
O
N
S
S
S
S
C
A
A
A
A
U
IS
H
H
H
H
LA
D
P
P
P
P
Processor Preferred elite germplasm in
key crops, including:
– High-fermentable starch corn for
ethanol
– High-extractable starch corn
High-lysine corn
Improved-oil soybeans for
processing
Improved-protein soybeans for feed
Feed corn with balanced proteins
Feed corn with increased amino acids
DISCOVERY PLATFORMS
Protein enhancements
Lipid enhancements
GENOMICS CONVENTIONAL MOLECULAR CROP ANALYTICS BIOTECHNOLOGY
BREEDING BREEDING
8
9. Product Pipeline
Y
R
E
2
3
4
1
H
V
C
E
E
E
Consumer Benefits
E
O
N
S
S
S
S
C
A
A
A
A
U
IS
H
H
H
H
LA
D
P
P
P
P
2005
Vistive Low-Linolenic Soybeans
Improved-protein soybeans
for food
Mid-Oleic + Low-Linolenic soybeans
Omega-3 soybeans for food uses
Zero Saturated Fat + Mid-Oleic +
Low-Linolenic soybeans
DISCOVERY PLATFORMS
Protein enhancements
Lipid enhancements
Carbohydrate enhancements
Bioactive compounds
GENOMICS CONVENTIONAL MOLECULAR CROP ANALYTICS BIOTECHNOLOGY
BREEDING BREEDING
9
10. FOCUS: CORN
Corn Presents the Most Attractive Global
Opportunity Across Key Agricultural Producers
EUROPE
ASIA
UNITED STATES 15M AC
HARVESTED ACRES
50M AC
HARVESTED ACRES
71.5M AC 2B BU
HARVESTED ACRES PRODUCTION
6B BU
PRODUCTION
11.7B BU
PRODUCTION
BRAZIL
ARGENTINA
30M AC
HARVESTED ACRES
6M AC
HARVESTED ACRES
1.6B BU
PRODUCTION
660M BU
PRODUCTION
Source: U.S.D.A. Foreign Agricultural Service
10
11. FOCUS: CORN
Corn Continues to be Most Profitable Large-Acre
Crop for U.S. Farmers
2003 U.S. CROP VALUE
25
$23.3
20
$17.5
(IN BILLIONS)
15
10
$7.8
5
$1.0 $0.8 $0.2
0
CORN WHEAT BARLEY
SORGHUM OATS
SOYBEANS
Source: USDA, NASS, Crop Production, 2003 Summary, Jan 2004; USDA, ERS, Outlook Reports, Jan 2004
11
12. FOCUS: CORN
Corn Seeds and Traits is Growing Contributor to
Monsanto Gross Profit
GROSS PROFIT
$700 CORN SEEDS AND TRAITS
SOYBEANS SEEDS AND TRAITS
$600
DOLLARS (IN MILLIONS)
$500
$400
$300
$200
$100
$0
2002 2003 2004
12
13. FARMER BENEFITS
Industry’s Most Diverse Genetic Pool Creates
New Opportunities U.S.
KEY MARKET ACRES BRAZIL ARGENTINA
BRAND LICENSED ASI
Corn 80M 30M 6M
AVAILABLE MARKET
CONTRIBUTING
Breeding
1
PLATFORMS
14% 33% 2% 35% 49%
PERCENT PENETRATED
6-to-8 year process undertaken to accelerate breeding:
GENOMICS
Late 1990s: Acquired 36 major corn breeding programs
(12 countries X average of 3 companies per country)
CONVENTIONAL
BREEDING
Early 2000s: Crossed genetic lines across acquired companies
MOLECULAR
BREEDING Today: Launching new hybrids from
inter-company crosses
CROP
ANALYTICS
BIOTECHNOLOGY
WHAT IS IT?
THE MOST
ADVANCED
GERMPLASM
CREATES THE
BEST-YIELDING
NEW CORN
DISCOVERY
HYBRIDS FOR PHASE I PHASE III
PHASE II PHASE IV LAUNCH
FARMERS Proof of Concept Adv. Development
Early Development Pre-Launch
13
14. FARMER BENEFITS
Industry’s Most Diverse Genetic Pool Created
New Opportunities U.S.
KEY MARKET ACRES BRAZIL ARGENTINA
BRAND LICENSED ASI
Field Trial 80M 30M 6M
AVAILABLE MARKET
Results
2
CREATING VALUE
14% 33% 2% 35% 49%
PERCENT PENETRATED
All categories of Monsanto’s elite corn germplasm out-yielded
• Value is measured
competitors’ germplasm across 2004 field trials
in market share
gains; Monsanto’s
Up Next: Launch 37 new products in our brands
U.S. branded seed
gained 4 points in 3
2004 BRANDED CORN GERMPLASM YIELD VS COMPETITORS
years
220
• Elite, high-yielding
MONSANTO
germplasm
210
COMPETITORS
refreshes product
BUSHELS/ACRE
portfolio at the 200
high end of pricing
190
• Our highest priced
180
conventional
hybrid is about 170
$100/unit or
160
$36/acre
150
95 100 105 110 115
RELATIVE MATURITIES (DAYS)
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
14
15. PROCESSOR BENEFITS
High Lysine Enhances Animal Feed, Shifts
Value to Seed
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
High Lysine Corn 4M 1M 4M
AVAILABLE MARKET
CONTRIBUTING
1
PLATFORMS
0% 0% 0%
PERCENT PENETRATED
Lower cost of animal feed ration – lysine – which cannot be
GENOMICS
produced by animals, so must be obtained through feed
CONVENTIONAL
Improved amino acid balance
BREEDING
Increased total energy
MOLECULAR
BREEDING
CROP
ANALYTICS
BIOTECHNOLOGY
WHAT IS IT?
CORN WITH
ENHANCED LEVELS
OF A LIMITING
AMINO ACID FOR
ANIMAL FEED
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
15
16. PROCESSOR BENEFITS
High Lysine Enhances Animal Feed, Shifts
Value to Seed
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Field and Feeding 4M 1M 4M
AVAILABLE MARKET
Trial Update
2
CREATING VALUE
0% 0% 0%
PERCENT PENETRATED
U.S. regulatory packages submitted
• Market value for
feed-grade lysine Field trials conducted in U.S. and Argentina this year; Evaluating
in roughly $1
over 12 hybrid genotypes in this year’s program
billion annually*
• Value shared with Excellent performance demonstrated in feeding trials to date
Cargill through
50/50 Renessen Up Next: Regulatory review
joint venture
LYSINE TOTALS IN TESTING
CONTROL WITH GENE
1800
FREE LYSINE (PPM)
1600
1400
1200
TARGET
1000
800
600
400
200
0
U.S.
SOUTH AMERICA
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
* Source: CEH Market
Proof of Concept Adv. Development
Early Development Pre-Launch
Research
16
17. PROCESSOR BENEFITS
Second-Generation High-Lysine Corn Could
Further Replace Feed Supplements
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Feed Corn with TBD TBD TBD
AVAILABLE MARKET
CONTRIBUTING
Improved Amino Acids
1
PLATFORMS
0% 0% 0%
PERCENT PENETRATED
Increased levels of lysine over first-generation High-Lysine Corn
GENOMICS
could displace more supplements used in animal feed
CONVENTIONAL
Second generation improves the overall amino acid balance in
BREEDING
corn, creating more available “energy” in feed
MOLECULAR
BREEDING
CROP
ANALYTICS
BIOTECHNOLOGY
WHAT IS IT?
SECOND-
GENERATION CORN
WITH ENHANCED
LEVELS OF LYSINE
FOR ANIMAL FEED
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
17
18. PROCESSOR BENEFITS
Second-Generation High-Lysine Corn Could
Further Replace Feed Supplements
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Field and Feeding TBD TBD TBD
AVAILABLE MARKET
Trial Update
2
CREATING VALUE
0% 0% 0%
PERCENT PENETRATED
• Market value for
Early field trials conducted in 2004; Lead event candidates
feed-grade lysine
identified
in roughly $1
billion annually*
Up Next: Test lead events in commercially relevant
• Value shared with
germplasm
Cargill through
50/50 Renessen
joint venture
LYSINE TOTALS IN TESTING
5000
FREE LYSINE (PPM)
TARGET
4000
3000
2000
1000
0
EVENT 1 EVENT 2
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
* Source: CEH Market
Proof of Concept Adv. Development
Early Development Pre-Launch
Research
18
19. FARMER BENEFITS
Second-Generation YieldGard Corn Borer
Controls More Insects
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Second-Generation 15M 4M
AVAILABLE MARKET 30-40M
CONTRIBUTING
YieldGard Corn Borer
1
PLATFORMS
0% 0% 0%
PERCENT PENETRATED
Broad control solution for fall armyworm and corn earworm for
GENOMICS
global expansion
CONVENTIONAL Durability solution for insect resistance management
BREEDING
MOLECULAR
BREEDING
FALL ARMY WORM CONTROL
CROP
ANALYTICS
BIOTECHNOLOGY
2ND-GEN YIELDGARD
2ND-GEN YIELDGARD CONTROL
CONTROL
WHAT IS IT? CORN BORER
CORN BORER
CORN EARWORM CONTROL
SECOND-
GENERATION CORN
BORER CONTROL,
WITH EXPANDED
INSECT AND
DISCOVERY
ENHANCED IRM PHASE I PHASE III
PHASE II PHASE IV LAUNCH
DURABILITY Proof of Concept Adv. Development
Early Development Pre-Launch
19
20. FARMER BENEFITS
Second-Generation YieldGard Corn Borer
Controls More Insects
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Field Trial 30-40M 15M 4M
AVAILABLE MARKET
2 Update
CREATING VALUE
0% 0% 0%
PERCENT PENETRATED
2004 field trials conducted in Puerto Rico, Argentina and U.S.
• Value reflects
enhanced insect Excellent control in high infestations levels
control and insect
resistance Up Next: Tests in 2006 field season to validate
management. Lifts
performance in multiple inbred backgrounds
the value of the
YieldGard Corn
CORN EARWORM FEEDING DAMAGE IN TRIALS
Borer trait.
12
EAR DAMAGE (CM)
10
8
6
4
2
0
YIELDGARD CONTROL
2ND-GENERATION YIELDGARD CORN
CORN BORER EVENTS BORER COMPETING
PRODUCT
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
20
21. FARMER BENEFITS
Drought Stress Tolerance Will Be a Family
of Traits in Pipeline
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Drought-Tolerant TBD TBD TBD
AVAILABLE MARKET
CONTRIBUTING
Corn
1
PLATFORMS
0% 0% 0%
PERCENT PENETRATED
GENOMICS Yield protection on all acres to protect against water deficits
Yield enhancement on all acres through improved water
CONVENTIONAL
BREEDING use
Cost savings on irrigated acres
MOLECULAR
BREEDING
CROP
ANALYTICS
BIOTECHNOLOGY
WHAT IS IT?
HYBRIDS
PROTECTED FROM
ENVIRONMENTAL
STRESS CREATED
FROM WATER
DISCOVERY
SHORTAGE PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
21
22. FARMER BENEFITS
Drought Stress Tolerance Will Be a Family
of Traits in Pipeline
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Field Trial TBD TBD TBD
AVAILABLE MARKET
Update
CREATING VALUE
0% 0% 0%
PERCENT PENETRATED
Two gene leads obtained positive results with more than
• Pricing depends on
choice of market one transformed event
• Stacking with weed
Up Next: Test stacking; continue with lead events
and insect control
enhances the
YIELD INCREASE IN TWO GENE TRIALS
margin opportunity
30 18
• Irrigation currently 3 EVENTS: GENE 1 3 EVENTS: GENE 2
YIELD INCREASE (BU/AC)
costs $50 to $100 16
25
per acre 14
20 12
10
15
8
10 6
4
5
2
0 0
EVENT 3 EVENT 3
EVENT 1 EVENT 2 EVENT 1 EVENT 2
GERMPLASM 1 GERMPLASM 2
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
22
23. FARMER BENEFITS
Improving Nitrogen Use Can Boost Yields
KEY MARKET ACRES U.S. BRAZIL ARGENTINA
Higher-Yielding TBD TBD TBD
AVAILABLE MARKET
CONTRIBUTING
Corn
1
PLATFORMS
0% 0% 0%
PERCENT PENETRATED
GENOMICS Increased yield achieved through enhanced nitrogen
uptake and utilization
CONVENTIONAL
BREEDING Potential to reduce fertilizer inputs
MOLECULAR
ROOT TOLERANCE TO LOW NITROGEN
BREEDING
CROP
ANALYTICS
BIOTECHNOLOGY
WHAT IS IT?
CONTROL WITH GENE
HYBRIDS THAT
CAN BETTER USE
AVAILABLE
NITROGEN IN THE
SOIL
DISCOVERY PHASE I PHASE III
PHASE II PHASE IV LAUNCH
Proof of Concept Adv. Development
Early Development Pre-Launch
23
24. FOCUS: CORN
Value Shift Continues…
INDUSTRY VALUE SHIFT FROM CROP CHEMICALS TO SEEDS AND
TRAITS IS WELL UNDER WAY
1996 2003 2008F
$9.2 BILLION
$7.5 BILLION $8.4 BILLION
$0.1
$1.3
$2.7
$2.6
$3.0 $4.5
$3.5 $3.6
$3.8
CROP CHEMICALS GERMPLASM BIOTECH TRAITS
Source: U.S. 1996-2003 Doane Agrotrak & Seed Studies; 2008 Monsanto Estimate
24
25. FOCUS: CORN
… To Food, Feed and Yield
YIELDGARD CORN BORER
VALUE
CROP
ROUNDUP READY CORN
CHEMICALS SHIFT YIELDGARD ROOTWORM
HIGH-LYSINE CORN
ANIMAL VALUE
FEED CORN WITH INCREASED
NUTRITION SHIFT AMINO ACIDS
HUMAN OMEGA-3
VALUE
CORN FOR
HEALTH SHIFT FEED
DROUGHT-
WATER & TOLERANT
VALUE CORN
SOIL
SHIFT HIGHER-
NUTRIENTS
YIELDING
CORN
VALUE SHIFT TO SEED
1996
25