3. STRATEGIC OUTLOOK
Monsanto’s Growth Opportunity Lies at the Intersection of
Demand, Innovation and Execution
Monsanto’s Simple Philosophy on Opportunity:
YIELD
More demand requires more
INNOVATION
More yield requires more
GROWTH
More innovation delivers more
3
4. STRATEGIC OUTLOOK
Increasing Protein Demand, Coupled with Boost from
Biofuels, Creates Sustained Long-Term Grain Demand
STATE OF AGRICULTURE:
STRETCHING SUPPLY
Yield Always Matters
WORLD CORN STOCKS-TO-USE RATIO1
► DEMAND PERSISTS
OVER TIME
120% 900
► Global corn ending stocks-
to-use ratio projected to be
STOCKS-TO-USE RATIO
800
100%
~14 percent for 2008/09
M METRIC TONS
700
80%
► Stocks-to-use are below the
600
nearly 50-year average of
60%
500
24 percent and at ratio not
40%
seen for almost 35 years
400
20% 300
► Largest corn crops on
record were produced in
0% 200
1964/1965
1968/1969
1970/1971
1972/1973
1974/1975
1976/1977
1978/1979
1980/1981
1982/1983
1984/1985
1986/1987
1988/1989
1990/1991
1992/1993
1994/1995
1996/1997
1998/1999
2000/2001
2002/2003
2004/2005
2005/2006
2008/2009F
1966-1967
2007 and 2008
1986/1987 2008/2009
1964/1965 ► Production needs to be
sustained at 2% above this
GLOBAL CORN STOCKS-TO-USE1 year’s crop, and demand
unchanged, to build stocks-
GLOBAL CORN CONSUMPTION1 to-use to 15 percent
1. USDA PSD View database query for global corn
4
5. STRATEGIC OUTLOOK
Monsanto’s Innovation Targeted at Doubling Yield by 2030,
Extending Competitive Lead and Creating New Value
DOUBLING YIELD WITH TECHNOLOGY: DOUBLING YIELD BY 2030
U.S. CORN EXAMPLE U.S. BASELINE
CROP 2000 BASELINE1
300
137 bu/ac
Corn:
280 HISTORIC YIELD GAIN
37 bu/ac
Soybeans:
AGRONOMIC PRACTICE IMPROVEMENTS
260 632 lbs/ac
BREEDING IMPROVEMENTS
Cotton:
BUSHELS PER ACRE
BIOTECH IMPROVEMENTS
240 STRATEGIC RATIONALE
Helping meet global
220
demand
200 Furthering competitive
lead
180
Creating new value for
160 farmers that creates
sustainable growth
140 opportunities
120
2000 2005 2010 2015 2020 2025 2030
2030 U.S. YIELD TARGET
>2x 2000 BASELINE
2030:
OF 137 BU/AC
5
6. FINANCIAL OUTLOOK
Yield and Innovation Create the Runway of Growth to 2012
for Seeds & Traits and for Monsanto as a Whole
GROSS PROFIT COMMITMENT: MILESTONES TO
2003-2012F
2012 TARGET
$9.5- ►Grow branded corn seed
$9.75B share 1-2 points in key
$10,000
SEEDS & GENOMICS GROSS PROFIT
countries annually
AG PRODUCTIVITY GROSS PROFIT
$7.2- ►2009 U.S. release of
$8,000
$7.4B
GP (in millions)
Roundup Ready 2 Yield
►2010 U.S. launch of
~2.25X
$6,000
SmartStax
2007
BASELINE
$4.2B ►Upgrade to second-
$4.20-
$4,000 generation technologies
$4.40 in cotton in the U.S. and
ONGOING
India
EPS
$2,000
►Vegetable seed business
to deliver 65% margins
through pricing to value,
$0
mix and operational
2003 2004 2005 2006 2007 2008 2009F 2012F
excellence
BASELINE
6
7. SEED & TRAITS
Breeding and Biotech Combine to Provide the Most Robust
Seed Package for Growers and Drive Growth to 2012
DISCOVERY PHASE I PHASE II
R&D PHASE: PHASE III PHASE IV LAUNCH
BREEDING
G
COMMERCIAL
IT PLATFORM
GERMPLASM
ANALYTICS
GENOMICS
MARKERS
SEED
ELITE
Germplasm SOLD TO
R FARMERS
BIOTECHNOLOGY
7
8. SEED & TRAITS
Seed Platforms Are Business Foundation, Establish Footprint
for Traits, and Create Diversified Crop Portfolio Globally
U.S. 2012
2008 SHARE TARGETS
EU27
25.5% 30-34% 2008 SHARE 2012 TARGETS
DEKALB
10.5% ~15% 12% 16-20%
ASI CORN
20% 24-28%
Asgrow
9% 10-12%
ASI
INDIA 2008 SHARE 2012 TARGETS
41% ~50%
Deltapine
36% 40-44%
CORN
5% 12%
COTTON
LA - NORTH 2008 SHARE 2012 TARGETS
62-66%
58%
CORN
BRAZIL 2008 SHARE 2012 TARGETS
40% 44-48%
CORN
ARGENTINA 2008 SHARE 2012 TARGETS
21% 31%
COTTON
46% 50-54%
CORN
Share for row crops provided reflects sales volume for Monsanto brands divided by total planted acres in respective geography.
Corn represents hybrid corn share in each respective market.
Source for Deltapine share in the U.S. is dmrkynetic 2008 new certified seed share estimates.
8
9. CORN SEED & TRAITS
2008 Yield Trial Results Reinforce Consistent Yield Advantage
of DEKALB Seed in the U.S.
2008 FINAL U.S. COMPETITIVE CORN YIELD
COMPARISON: DEKALB
12
DEKALB ANNUAL YIELD ADVANTAGE
GEOGRAPHY: U.S.
(APPROXIMATE DIFFERENCES)
DEKALB THREE -YEAR ROLLING
10
Grow 2 Share
2009
YIELD ADVANTAGE
OBJECTIVE:
Points
9.6
2008 PERFORMANCE UPDATE
BUSHELS/ACRE
8.8
8
8.4 8.4 8.3
8.2
• In 2008 in > 15,300 7.8
7.1
comparisons, DEKALB 6
out-yields competitive
best by 9.6 bu/acre on
4
average
• Farmers have been able
2
to count on DEKALB to
consistently deliver a
yield advantage of seven 0
or more bushels per acre
2005 2006 2007 2008
Source: Annual yield advantage calculated each year by comparing leading DEKALB volume products within each RM zone to national
competitor products within 2 RM days. 2008 data as of November 23, 2008. Weighted average calculated to 15% moisture. >230,000
comparisons represented in the four years of rolling averages.
9
10. CORN SEED & TRAITS
Value to Farmer Over Competitive Offering Combines Yield and
Harvest Moisture Advantages
MOISTURE YIELD
2008 Grower Income Advantage -$/Acre
$60
$54 $55
$50
$50
GEOGRAPHY: U.S.
$41
2008 PERFORMANCE UPDATE
$40
• DEKALB Harvest $33
moisture and yield
$30
advantage creates total
value advantage over the
competition of $33-
$20
$55/acre
$10
$0
100 RM 105 RM 110 RM 115 RM
90/95 RM
RELATIVE MATURITIES (DAYS)►
COMPARISONS: >1,040 >2,550 >790 >4,700 >4,550
APPROXIMATE BU/AC
11.0 11.3 1.9 10.8 8.3
ADVANTAGE:
HARVEST MOISTURE
0.9% 1.2% 2.3% 1.2% 0.9%
ADVANTAGE:
1. Source – 2008 Monsanto and third party head-to-head comparisons of 5 leading DEKALB brands within each RM Zone to national competitor products containing similar crop
10
protection traits within 2 RM as of November 23, 2008. Drying cost based on $0.06/bu per point of moisture and corn price calculated at $4.00/ bu.
11. CORN SEED & TRAITS
Triple-Stack Penetration Accelerates, Creating Added Growth
and Setting Stage for SmartStax Launch
U.S. CORN TRAIT OPPORTUNITY: 2007-2010F
70 MONSANTO TRIPLE-STACK ACRES
60 SMARTSTAX ACRE OPPORTUNITY
GEOGRAPHY: U.S.
2008 PERFORMANCE UPDATE
50
(IN MILLIONS)
U.S. ACRES
• The majority of U.S. branded corn
seed orders to date are triple-stack 40
orders, reflecting farmers’ demand
30
for technology and yield
20
• Over the past two years, DEKALB
VT Triple outperformed Pioneer®
10
triples by nearly 9.7 bushels1 in
>12,000 head-to-head comparisons
0
across the U.S. 2007 2008 2009F
2007 2008 2009F 2010F
2010
Opportunity
• Those two years were remarkably Triple
17.6M 29.1M 34-35M 60-65M
different in insect and moisture Stack/SmartStax
stress, yet DEKALB VT Triple Opportunity widens in 2010 with planned launch of SmartStax
consistently delivered a yield
advantage
1. Source: 2008 Monsanto and third party head-to-head comparisons of 5 leading DEKALB hybrids within each
RM zone to Pioneer® products containing similar crop protection traits within 2 RM days as of November 23,
• This is value above and beyond the 2008. Weighted average calculated to 15% moisture.
15-20 bu/acre advantage of our
triple-stack over conventional seed
11
12. CORN SEED & TRAITS
Leadership Continues With Next Game-Changer in Corn;
SmartStax On Track to Reset Trait Platform in 2010
SMARTSTAX
COMMERCIAL OPPORTUNITY
LAUNCH TARGET: 2010
TARGET ACRE
60-65M
OPPORTUNITY:
VALUE PROPOSITION
2008 trials evaluating SmartStax in elite
germplasm, quantifying sources of
potential on-farm yield advantages:
Improved
1-2%
consistency:
SmartStax STATUS
Primary pests
Improved
• Precedent established with U.S. EPA on
consistency: 1-2%
dual-mode-of-action traits:
Secondary pests REFUGE
• YieldGard VT PRO received reduced
REDUCTION
Reduced refuge1 3-6% STRATEGY: refuge in Southern geographies
• Bollgard II natural refuge in cotton
5-10%
• On track for 2010
•
COMMERCIAL All components have U.S. approvals
TRACK: • Final regulatory package with 5% refuge
request submitted in June 2008
12
1. Subject to the approval of the EPA
13. SOYBEAN SEED & TRAITS
Initial Soybean Yield Performance Continues to Reinforce
Breeding Leadership
2008 PRELIMINARY U.S. COMPETITIVE
SOYBEAN YIELD COMPARISON: ASGROW
ASGROW 3-YEAR ROLLING
2 ASGROW ANNUAL YIELD
(APPROXIMATE DIFFERENCES)
AVERAGE YIELD ADVANTAGE
ADVANTAGE
GEOGRAPHY: U.S.
OBJECTIVE: Grow footprint
1.5
2008 PERFORMANCE UPDATE
BUSHELS/ACRE
1.5
• Yield data from 2008 1.4
indicates continued yield
1.2
1
advantage for national
1.1
1.0
brands versus best-in-
class competitors
0.7
0.5
• The game-changing event
in soybean yield will be
the introduction of
0
Roundup Ready 2 Yield in
2009 2006 2007 2008
Source: Preliminary- all Asgrow commodity Products; Commercial Data (Market development and side x side)
as of 11/21/08; head-to-head comparisons within +/-0.4 RM vs. Pioneer & Syngenta
>77,000 comparisons represented in the three years of rolling averages.
13
14. SOYBEAN SEED & TRAITS
Roundup Ready 2 Yield Soybeans Is One Of the Most-
Anticipated Launches Because of Step-Change In Yield
ROUNDUP READY 2 YIELD
LAUNCH PLANS
► U.S. controlled commercial release on
1-2M acres in maturity groups 2 and 3
► >50% of the U.S. soybean acres
planted are in groups 2 and 3
► Multiple varieties available for 2009
2009
release
VALUE PROPOSITION
► EU import approval recently obtained,
YIELD
IMPROVEMENT ON
3-5 bu/ac
AVERAGE YIELDS
demonstrating continued global
IN GROUPS 2 & 3:
acceptance
INCREMENTAL
YIELD VALUE TO
$27-$45/ac ► Launch on 5-6M acres in the U.S. with
FARMER (VERSUS
ROUNDUP READY):
2010 up to 30 new varieties with expanded
PRICING
maturity groups
SEAMLESS PRICE
FOR FIRST-
$49-$52 ► Expand majority of Asgrow varieties to
GENERATION
ROUNDUP READY
2011
SEED (PER ACRE)1:
Roundup Ready 2 Yield
SEAMLESS PRICE
$69-$72
FOR ROUNDUP
READY 2 YIELD
SEED (PER ACRE)1:
14
1. Reflects seamless price to the farmer, including trait value, germplasm value and value provided by the seed treatment.
15. SOYBEAN SEED & TRAITS
Roundup Ready 2 Yield Will Be the First Biotech Yield Trait
Offered in Soybeans
NEW: ROUNDUP READY 2 YIELD SOYBEANS: COMMERCIAL CHECKS
PRELIMINARY 2008 COMPARISONS TO COMMERCIAL ROUNDUP READY SOYBEANS
COMPETITORS’ PRODUCT WITH
59 ROUNDUP READY 2 YIELD ROUNDUP READY TRAIT
57
57
55
56
Bushels per Acre
53
53
51
52
49
47
45
43
41
39
37
35
2 3 SOURCE:
RELATIVE MATURITIES►
Preliminary 2008
head-to-head
COMPARISONS: >100 >800 comparisons of all
Roundup Ready 2
APPROXIMATE BU/AC Yield products
ADVANTAGE FOR ROUNDUP 4.1 3.7 available for sale in
READY 2 YIELD: 2009 vs. national
competitors
PERCENT YIELD Roundup Ready as
ADVANTAGE FOR ROUNDUP 7.9% 7.0% of Nov. 19, 2008
READY 2 YIELD:
► Power in the Pod: Roundup Ready 2 Yield soybean varieties produce more 3-bean
pods per plant1
SOURCE: 19 Monsanto field trials with seed counted from over 4,728 plants from 340 plots. p value <0.001 Data as of November 24, 2008.
15
16. SOYBEAN SEED & TRAITS
Roundup Ready 2 Yield Soybeans to Serve as Platform for
Robust Soybean Pipeline
STATE OF AGRICULTURE:
SOYBEAN RENAISSANCE
A New Soybean Platform
► Roundup Ready 2 Yield becomes the
platform for soybean traits
U.S. SOYBEAN ACRE TRAIT
STACKING POTENTIAL
► Four traits in soybean pipeline in
Phase 3 focused on U.S. market:
Vistive III soybeans
HIGHER-YIELDING
Dicamba-Tolerant soybeans
DICAMBA-TOLERANT
Omega-3 soybeans
OIL TRAITS
Higher-Oil soybeans
ROUNDUP READY 2 YIELD
► Phase 3 Insect-Protected + Roundup
Ready 2 soybean targeted for Brazil;
farmers currently spend ~$6.00/acre for
insecticides and application
BRAZIL SOYBEAN ACRE TRAIT
STACKING POTENTIAL
► Higher-yielding soybeans, with 10
percent yield increase target above
Roundup Ready 2 Yield, have potential
INSECT-PROTECTED BY
to reset soybean yield bar in middle of
ROUNDUP READY 2
next decade
16
17. R&D PIPELINE
Investment in Traits Yields Significant Returns for Both
Monsanto and Growers
ROUNDUP READY SOYBEAN TRAIT
LIFE-TO-DATE NET SALES = ~$4.0B
GROWERS RECEIVED
~$11B1
OF FARM INCOME
BENEFIT
~40X
INITIAL
INVESTMENT
~$100M
INITIAL R&D
INVESTMENT
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
1. SOURCE: Graham Brookes & Peter Barfoot PG Economics Ltd, UK June 2008 “GM crops: global socio-economic and environmental impacts 1996-2006” Amounts
in nominal terms and represent global farm income benefit from 1996-2006. Argentina benefit excluded from Roundup Ready soybean grower farm income benefit.
17
18. R&D PIPELINE
R&D Engine Is Poised to Launch Average of One Game-
Changing Technology Every Other Year Through Mid-Decade
R&D PIPELINE: ADVANCED GAME-CHANGING TECHNOLOGIES
2008 2009 2010 2011 2012 TO MID-DECADE
Roundup Drought- Nitrogen-
SmartStax
Ready 2 Yield Tolerant Corn Utilization
Soybeans Family1 Corn Family1
• Second-gen soybean • All-in-one corn trait • Value likely in improved • Targets ways to use
trait platform platform yield under stress and nitrogen more efficiently
potential for water
• China import approval • On track for 2010 launch
replacement
received September – Submitted for
2008 regulatory review and
refuge reduction
• On track for 2009
release
SUPERIOR, NE - FIELD TRIALS – 2007 FARM PROGRESS SHOW – 2007
WITH GENE
CONTROL HYBRID
FARM PROGRESS SHOW – 2007 (94 BU/AC)
(76 BU/AC)
1. Part of the Monsanto-BASF Yield and Stress R&D Collaboration
18
19. R&D PIPELINE
Monsanto’s Biotech Pipeline Is Accelerating, With Analysis
Under Way for January 2009 Update on Progress
R & D PIPELINE UPDATE
First Quarter Earnings Call to
Highlight Annual R & D Pipeline
Review and Update
Currently completing statistical
analysis on 100’s of 2008 field
trials; nearly 175 trial locations for
Q4
Q1
yield & stress projects alone
Multiple projects expected to
Q3
Q2
advance in January 2009
19
20. SUMMARY
Monsanto’s Growth Opportunity Lies at the Intersection of
Demand, Innovation and Execution
Monsanto’s Simple Philosophy on Opportunity:
YIELD
More demand requires more
INNOVATION
More yield requires more
GROWTH
More innovation delivers more
20