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ROBERT T. FRALEY, PH.D.
Chief Technology Officer and Executive Vice President




MYSTIC RESEARCH FACILITY
INVESTOR PRESENTATION
January 2005




                                                        1
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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

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monsanto 01-18-05

  • 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