1. Robert T. Fraley, Ph.D.
Chief Technology Officer and Executive Vice President
15th Annual Chemical Conference
Smith Barney
Dec. 8, 2004
1
2. Forward-Looking Statements
Certain statements contained in this presentation, such as statements concerning the company's anticipated
statements
financial results, current and future product performance, regulatory approvals, currency impact, business and
regulatory
financial plans and other non-historical facts are quot;forward-looking statements.quot; These statements are based on
non- quot;forward-
current expectations and currently available information. However, since these statements are based on factors that
However,
involve risks and uncertainties, the company’s actual performance and results may differ materially from those those
company’
described or implied by such forward-looking statements. Factors that could cause or contribute to such differences
forward- such
include, among others: the company's exposure to various contingencies, including those related to Solutia Inc.,
contingencies,
litigation, intellectual property, regulatory compliance (including seed quality), environmental contamination and
(including
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
Roundup company’
estimates and projections, for example, those with respect to product returns and grower use of our products and
oduct
pr
related distribution inventory levels; the effect of weather conditions and commodity markets on the agriculture
conditions
business; the success of the company’s research and development activities and the speed with which regulatory
regulatory
company’
authorizations and product launches may be achieved; domestic and foreign social, legal and political
and
developments, especially those relating to agricultural products developed through biotechnology; the company’s
company’
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
company’
protection for its intellectual property; the effects of the company's accounting policies and changes in generally
company's
accepted accounting principles; the company's ability to fund its short-term financing needs; general economic and
its short-
business conditions; political and economic conditions due to threat of future terrorist activity and related military
threat
action; and other risks and factors detailed in the company's filings with the U.S. Securities and Exchange
filings
Commission. Undue reliance should not be placed on these forward-looking statements, which are current only as of
forward-
the date of this release. The company disclaims any current intention to revise or update any forward-looking
intention forward-
statements or any of the factors that may affect actual results, whether as a result of new information, future events
or otherwise.
2
4. Overview
Biotechnology Is Most Rapidly Adopted Technology in
History of Agriculture
Global Monsanto Planted Biotech Acres
Acres in millions
180
Canola
160
Cotton
140
Corn
120
Soybeans
100
80
60
40
20
0
1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Monsanto estimates
4
5. Overview
Biotechnology Provides Better Economical and
Environmental Solutions
Effect of Biotech Crops on U.S. Pesticide Use
in 2003 Million
Lbs.
Soybeans (20)
Corn (13)
Cotton (13)
Canola (0.2)
Total Reduction in
(46)
Pesticide Use
Source: “US Agriculture of Biotechnology Derived Crops Planted in 2003 – An Update of Eleven cases
of Eleven Case Studies,” National Center for Food & Agriculture Policy. October 20, 2004
Studies,” 2004
5
6. Overview
Early, Major Investment in Seeds Captured Value Shift
Monsanto Seed Partners Share
American Seeds Brand Share
Monsanto Brand Share
Monsanto Genetic Market Share in U.S. Corn Seed
49%
60% 48%
45%
43%
50%
40%
30%
20%
10%
0%
2001 2002 2003 2004
Source: Monsanto Estimates
6
7. Overview
Monsanto Now Services Seed Market
Through Three Outlets
Genomics-Based R&D Pipeline
American Seeds, Inc.
Branded Seed Seed
Businesses Partners
Autonomous Autonomous Autonomous
Seed Co. Seed Co. Seed Co.
7
8. Overview
Product Development, Regulatory and Commercial
Experience Generate Momentum
140
120
100
80
U.S. Trait Acres 60
40
2004 20
0
MON DD BAY DOW SYT BAS
30
25
20
15
USDA Biotech 10
Approvals 5
0
MON DD BAY DOW SYT BAS
6
5
4
Pipeline products 3
in USDA 2
1
review process 0
MON DD BAY DOW SYT BAS
8
9. Round 1: Seed and Single-Trait Positions Firmly
Established and Growing
• Seed Breeding Advancements
• First-Generation Traits
• Geographic Expansion
• Value Capture
Round 1
9
10. Round 1: Breeding
Industry’s Most Diverse Genetic Pool Created
New Opportunities
6-to-8 year process
6-to-8 year
Late 1990s Early 2000s Today
Acquired 36 major corn Crossed genetic lines Launching new hybrids
breeding programs across acquired from inter-company
(12 countries x average of 3 companies crosses
companies per country)
Temperate
Temperate
Sub-Tropical
Sub-
Sub-Tropical
Monsanto
corn Tropical
Tropical
germplasm
flows
globally Sub-Tropical
Sub-
Sub-Tropical
Temperate
Temperate
10
11. Round 1: Breeding
Yield Gains from Seed Breeding Accelerating
High Performing Germplasm
MON 2004 Branded Yield vs. Competitors
MON 2004 Branded Yield vs. Competitors
Soybean Yield (Bushels/Acre)
Corn Yield (Bushels/Acre)
65
220
Monsanto Brand Monsanto Brand
210 Competitors Competitors
60
200
55
190
180
50
170
45
160
150 40
95 100 105 110 115 Group I Group II Group III Group IV Group V
Relative Maturity (Days) Maturity Zones
Source: Monsanto estimate, includes ASI formation
11
12. Round 1: Geographic Expansion
Available Market for Roundup Ready Corn Is Growing
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
20M
Available Market 50M 5M
20M
Available Market 50M 5M
Genomics
Percent Penetrated (2004) 33% 0% 0%
Percent Penetrated (2004) 33% 0% 0%
1 Regulatory Processes
Conventional
Breeding
European Union
Molecular
22 products in regulatory queue
Breeding
under Directive 2001/18; 11 from
Monsanto
Crop Analytics
Roundup Ready corn (NK603)
Biotechnology
approved for importation and whole
corn feed in July 2004; approved for
Novel Food in October 2004
Applications for stacks in queue
Argentina
NK603 approved for planting in
Argentina in July 2004
Application for stacks in queue
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
12
13. Round 1: Geographic Expansion
Available Market for Roundup Ready Corn Is Growing
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
20M
Available Market 50M 5M
20M
Available Market 50M 5M
Genomics
Percent Penetrated (2004) 33% 0% 0%
Percent Penetrated (2004) 33% 0% 0%
2 Grain Channeling in the United States
Conventional
Breeding
Business Approach
Molecular
Breeding
Website indicates to farmers
which elevators in their area
Crop Analytics
accept biotech grain not yet
approved for import into the
European Union
Biotechnology
Communication and
education program under way
Percent of growers citing
grain marketing concerns has
dropped from roughly 60% to
nearly 30% in past year*
*Based on Roundup Ready corn surveys taken in fall of 2003 and
spring of 2004 in Eastern Iowa/Northern Illinois region
www.866sellcorn.com
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
13
14. Round 1: First-Generation Traits
YieldGard Rootworm Continues High Satisfaction
Pattern with Biotech Traits
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
5M
Available Market 15M-20M
15M- 1M
5M
Available Market 15M-20M 1M
Genomics
Percent Penetrated (2004) 9% 0% 0%
Percent Penetrated (2004) 9% 0% 0%
1 Grower Satisfaction
Conventional
Breeding
Percent of customers very or somewhat satisfied1
Molecular
Breeding 100%
80%
Crop Analytics
60%
Biotechnology
40%
20%
0%
Roundup Roundup Bollgard/ Roundup YieldGard YieldGard
Ready Roundup Rootworm
Corn
Ready
Ready
Ready Corn**
Borer*
Soybeans* Cotton* Corn*
Cotton*
1Based on all growers using specified seed and treatment and able to answer very satisfied, somewhat satisfied, neutral, or not satisfied.
satisfied.
*Source: Marketing Horizons Trait Satisfaction Studies 2002
**Source: Marketing Horizons Trait Satisfaction Studies 2004
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
14
16. Round 1: First-Generation Traits
YieldGard Rootworm Continues High Satisfaction
Pattern with Biotech Traits
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
5M
Available Market 15M-20M
15M- 1M
5M
Available Market 15M-20M 1M
Genomics
Percent Penetrated (2004) 9% 0% 0%
Percent Penetrated (2004) 9% 0% 0%
3 Advantage of Bigger and Healthier Roots
Conventional
Breeding
From 172 field trials in Illinois in 2004
Molecular
Breeding
− YieldGard Rootworm had greater yield than competition
Crop Analytics
− Just under 12 bushels per acre advantage, or just over $33
per acre
Biotechnology
520
220
500
210
200 480
190 460
Yield (Bushels/Acre) Gross Income ($/Acre)
YieldGard Rootworm Competition
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
16
17. Round 2: Monsanto Is Uniquely Positioned To
Bring Next Generation of Traits to Market
• Continued Growth from Round 1
• Second-Generation Traits
• Greater Intensity of Stacked Traits
Round 1 Round 2
17
18. Round 2: Second-Generation Traits
Roundup Ready Flex Cotton Raises the Bar
Key Market Acres U.S. Australia
Key Market Acres U.S. Australia
Contributing Platforms
0.5M – 0.8M
Available Market 10M-15M
10M- 0.5M – 0.8M
Available Market 10M-15M
Genomics
0%
Percent Penetrated 0% 0%
Percent Penetrated 0%
1 Expanded Window of Application
Conventional
Breeding
Molecular
Expanded window of over-the-top application
Breeding
- Increased margin of crop safety
Crop Analytics
- More “flexible” weed control
Increased grower convenience
Biotechnology
Reduced need for specialized spray equipment
Over-the-top window of application
Roundup Ready® Flex Cotton
Roundup Ready®
Cotton
(< 4 lf.)
Emergence Layby Preharvest Harvest
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
18
19. Round 2: Second-Generation Traits
Roundup Ready Flex Cotton Raises the Bar
Key Market Acres U.S. Australia
Key Market Acres U.S. Australia
Contributing Platforms
0.5M – 0.8M
Available Market 10M-15M
10M- 0.5M – 0.8M
Available Market 10M-15M
Genomics
0%
Percent Penetrated 0% 0%
Percent Penetrated 0%
2 2004 Field Trial Update
Conventional
Breeding
Molecular
Over 200 field trials conducted in
Breeding
2004
Crop Analytics
Biotechnology
8 cotton seed companies
participating in trial program
Cotton States launching
exclusively on a second-generation
trait platform
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
19
20. Round 2: Second-Generation Traits
Broad Licensing Supports Roundup Ready Flex
Introduction
Key Market Acres U.S. Australia
Key Market Acres U.S.
Key Market Acres U.S. Australia
Contributing Platforms
0.5M – 0.8M
Available Market 10M-15M
10M- 0.5M – 0.8M
Available Market 10M-15M
Genomics
0%
Percent Penetrated 0% 0%
Percent Penetrated 0%
3 Broad Licensing
Conventional
Breeding
Broad licensing mitigates risk of seed market share
Molecular
changes
Breeding
U.S. cotton seed market shares
DPL
100%
Crop Analytics
Stoneville
FiberMax
Biotechnology Phytogen
75%
Others
50%
25%
0%
1999 2000 2001 2002 2003 2004
Source: USDA
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
20
21. Round 2: Stacked Traits
Stacking Biotech Traits Adds New Dimension to
Market Potential — Multiplying Margin Opportunities
Monsanto U.S. Biotech Intensity Index*
Average number of biotech traits per biotech acre
1.6 Cotton (2 Traits) 1.5
Corn (3 Traits)
1.5
Soybeans (1 Trait)
1.4
1.3
1.2
1.2
1.1
1.0
1
1996 1997 1998 1999 2000 2001 2002 2003 2004F 2005F 2006F
U.S. Biotech Margin Opportunities
Corn Cotton
16 million
52 million 10 million
1.2
42 million 1.5
biotech
biotech X =
biotech
X =
intensity
biotech intensity
margin
margin acres
index
acres index
opportunities
opportunities
21 * Monsanto traits only
22. Round 3: Pipeline Potential Builds on Established
Platform
• Continued Growth from Rounds 1 & 2
• Improved Food and Feed Biotech Traits
• Biotech Yield Traits
Round 1 Round 2 Round 3
22
23. Round 3: Food, Feed and Yield Traits
Pipeline Products Reach New Markets and Expand
Base in Corn, Soybeans and Cotton
Food Healthier Oil Soy
Yield
(Low Linolenic
Feed Omega-3 Soy
Omega- Mid Oleic
(Stearidonic acid) Low Saturate)
Enhanced High
Drought Tolerant
Improved Protein Soy
Lysine Corn
Corn, Soy, Cotton
(Beta Conglycinin)
Low Linolenic Cold Tolerant
High Lysine Corn
Soy Corn
Improved Protein
Soy
Nitrogen
Utilization Corn
Commercialized Agronomic Traits
YieldGard
Roundup YieldGard
Corn Borer
Ready Corn, Rootworm
Bollgard I & II
Soy, Cotton Corn
Cotton
2nd Generation
Roundup Ready
YGCB II Corn YGRW II Corn
Agronomic Traits Flex Cotton
23
24. Round 3: Feed Traits
High Lysine Enhances Essential Amino Acids in Feed
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
1 High Lysine Corn
Conventional
Breeding
Enhance level of limiting
Molecular
essential amino acids in feed
Breeding
Crop Analytics
Lower cost of animal feed ration
Biotechnology
Improved amino acid balance
High Lysine Corn – Total Lysine
Increased total 150 Target
energy
Indexed 100
U.S. regulatory 50
packages
submitted 0
Neg. Pos. Neg. Pos.
Event 1 Event 2
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
24
25. Round 3: Feed Traits
High Lysine Enhances Essential Amino Acids in Feed
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
2 2004 Field and Feeding Trial Update
Conventional
Breeding
Molecular
Breeding
Field trials conducted in United
States and Argentina this year
Crop Analytics
Evaluating over 12 hybrid
Biotechnology
genotypes in this year’s program
Excellent performance
demonstrated in feeding trials to
date
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
25
26. Round 3: Feed Traits
High Lysine Enhances Essential Amino Acids in Feed
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
3 2004 Field Trial Update
Conventional
Breeding
Molecular
Breeding 2000
1800
Crop Analytics 1600
Free Lysine (ppm)
1400
1200
Biotechnology
1000
800
600
400
200
0
Neg Hybrid South America Neg Hybrid U.S.
Controls Controls
Initial evaluations show germplasm hitting or exceeding
efficacy targets
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
26
27. Round 3: Food Traits
Preparing for 2005 Launch of First-Generation Output
Trait — VISTIVE Soybeans
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market 5M TBD
TBD
Available Market 5M TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
1 VISTIVE Low Linolenic Soy
Conventional
Breeding
Reduce/eliminate trans fats with
Molecular
increased oil stability, requiring less
Breeding
hydrogenation
Achieve yield parity and stack with
Crop Analytics
Roundup Ready trait
Reduce linolenic acid to <3%
Biotechnology
Linolenic Linoleic Sats
Oleic
18:3 18:2 18:0 / 16:0
18:1
Standard
Soybean
Low Lin
Mid Oleic + Low
Lin
Zero Sat + Mid
Oleic + Low Lin
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
27
28. Round 3: Food Traits
Preparing for 2005 Launch of First-Generation Output
Trait — VISTIVE Soybeans
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market 5M TBD
TBD
Available Market 5M TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
2 2004 Field Trial Update
Conventional
Breeding
Molecular
Advanced field testing
Breeding
Shipping several tons of oil to food
Crop Analytics
companies for food formulation testing
Biotechnology
Finalizing processor programs; Ag
Processing, Inc. (AGP) and Cargill
participating
Launch in 2005
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
28
29. Round 3: Food Traits
Omega-3 Biofortification Is a Food Industry
Breakthrough
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
1 Oilseed Produced Omega-3
Conventional
Breeding
Dietary Omega-3 in Biotech Oilseed
Molecular
American Heart Assn.,
Breeding
Fatty Acid (wt%)
American Dietetic 100% New
Assn., and 1,600+
Crop Analytics
Bio-available
Omega-3
research studies 80
support health benefits
Biotechnology
Other Poly-
60
Vegetable oils unsaturates
enriched with bio- 40
PIC? Mono-
available Omega-3 unsaturates
20
Omega-3 promotes
heart health Saturates
0
Control Biotech
Enhanced stability Oilseed Oilseed
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
29
30. Round 3: Food Traits
Omega-3 Biofortification Is a Food Industry
Breakthrough
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
2 2004 Field Trial Update
Conventional
Breeding
Molecular
SDA/GLA Levels
Breeding
(7 Lead Events in 9 Locations)
Crop Analytics
30
Biotechnology
25
Fatty Acid Wt %
20
Target
PIC? 15
10
SDA
5 GLA
0
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
30
31. Round 3: Yield
Drought Stress Tolerance Is One of Potential New
Agronomic Traits in Pipeline
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
1 Drought Tolerance
Conventional
Breeding
Pricing depends on choice
Yield protection
Molecular
of market
on all acres to
Breeding
protect against
Stack with weed and insect
water deficits
Crop Analytics
control traits enhances
margin opportunity
Yield enhancement
Biotechnology
on all acres
through improved
water use
Cost savings
on irrigated acres
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
31
32. Round 3: Yield
Drought Stress Tolerance Is One of Potential New
Agronomic Traits in Pipeline
Key Market Acres U.S. Brazil Argentina
Key Market Acres U.S. Brazil Argentina
Contributing Platforms
TBD
Available Market TBD TBD
TBD
Available Market TBD TBD
Genomics
Percent Penetrated 0% 0% 0%
Percent Penetrated 0% 0% 0%
2 2004 Field Trial Update
Conventional
Breeding
Two gene leads obtained positive results with more
than one transformed event
Molecular
Breeding
Crop Analytics Performance of 3 Events (Gene 1) Performance of 3 Events (Gene 2)
18
35 Yield Increase (bu/acre)
Yield Increase (bu/acre)
Biotechnology 16
30
14
25
12
20 10
8
15
6
10
4
5
2
0
0
Event One Event Two Event Three
Event One Event Two Event Three
Discovery Phase 1 Phase 3 Phase 4
Phase 2 Launch
Proof of Concept Adv. Development Pre-Launch
Pre-
Early Development
32
33. Summary
Value Shift to Seed Continues…
Industry value shift from crop chemicals to
seeds and traits is well under way
1996 2003 2008F
$7.5 Billion $8.4 Billion $9.2 Billion
$3.6 $2.6
$4.5
$0.1 $3.8
$1.3
$3.5
$3.0 $2.7
Crop Chemicals Germplasm Biotech Traits
Source: U.S. 1996-2003 Doane AgroTrak & Seed Studies; 2008 Monsanto Estimate
1996-
33
34. Summary
…to Food, Feed and Yield
Water and
Soil Value Shift
Value Shift
Nutrients
Human
Value Shift
Value Shift
Health
Animal
Value Shift
Value Shift
Nutrition
Crop
Value Shift
Value Shift
Chemicals
Seed
34
