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BRETT BEGEMANN
EXECUTIVE VICE PRESIDENT,
INTERNATIONAL COMMERCIAL


MERRILL LYNCH,
AGRICULTURAL CHEMICALS CONFERENCE

JUNE...
Forward-Looking Statements




Certain statements contained in this release are quot;forward-looking statements,quot; such...
Non-GAAP Financial Information




This presentation may use the non-GAAP financial measures of “free cash flow,” earnings...
OVERVIEW

U.S., Brazil and Argentina Account for More Than 90 Percent
of World Grain Trade
      GLOBAL VIEW - 2010 HORIZO...
COMMERCIAL

 Farmers ‘Buy Yield,’ Creating Opportunity for Seeds and
 Traits Growth

    FARMERS’ DECISION EQUATION       ...
COMMERCIAL


Breeding and Biotechnology Combine to Advance
Harvested Yield to the Next Level
 FOCUS: YIELD

 WHAT MATTERS ...
COMMERCIAL

 Opportunity to Improve Global Corn Yields Comes Through
 Investments in Technology


                     COR...
COMMERCIAL

Monsanto’s Global Germplasm and Breeding Programs
Pave Way for Future Share Growth Internationally

          ...
COMMERCIAL


   Corn Market Share Gains Still To Fully Reflect Power of
   Molecular Breeding Application

               ...
COMMERCIAL


Yield Advantages Fuel Market Share Growth in Europe


 FOCUS: EUROPE
                             COMMERCIAL ...
COMMERCIAL

Market Leadership In Corn Maintained While Refreshing
Portfolio Mix Through Advanced Breeding

 FOCUS: BRAZIL
...
COMMERCIAL

Seminis to Leverage Portfolio, Pricing and Molecular
Breeding to Create New Growth

FOCUS: SEMINIS
           ...
COMMERCIAL

   Expanding Line of Cantaloupe Offers Improved Post-
   Harvest and Fresh-Processing Quality
                ...
COMMERCIAL

Existing Biotech Traits Set Up Three Pathways for
Mid-Term Growth Internationally
                     EXAMPLE...
COMMERCIAL


Market Potential for International Biotech Traits by 2010
Highlights Continued Growth Potential

            ...
COMMERCIAL

Roundup Ready Soybean Penetration Accelerates, Corn
Trait Adoption Poised for Solid Growth

 FOCUS: BRAZIL
 CO...
COMMERCIAL

Momentum in Stacking Cotton Traits in Australia Extends
Margin Potential Per Acre

 FOCUS: AUSTRALIA

        ...
COMMERCIAL

Bollgard II Cotton Launches and Expands Insect Spectrum,
Corn Traits Submitted for Regulatory Approval
FOCUS: ...
DISCOVERY             PHASE I                 PHASE II      PHASE III     PHASE IV
     PIPELINE
                         ...
TECHNOLOGY

Multi-Generational Drought-Tolerant Corn Is Advancing
Closer to Commercial Reality with Global Applications
  ...
TECHNOLOGY

Second-Generation Roundup RReady2Yield Soybeans
Enhances Yield Globally
                                      ...
TECHNOLOGY


   Biodiesel Production Will Drive Incremental Vegetable Oil
   Demand
                                      ...
SUMMARY

Foundation Created in International Operations Sets Stage
for Seed and Trait Expansion

          CORN:
         ...
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monsanto 06-14-06

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monsanto 06-14-06

  1. 1. BRETT BEGEMANN EXECUTIVE VICE PRESIDENT, INTERNATIONAL COMMERCIAL MERRILL LYNCH, AGRICULTURAL CHEMICALS CONFERENCE JUNE 14, 2006 1
  2. 2. Forward-Looking Statements Certain statements contained in this release are quot;forward-looking statements,quot; such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. 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: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful completion and operation of recent and proposed acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's filings with the SEC. 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 or obligation to update any forward-looking statements or any of the factors that may affect actual results. 2
  3. 3. Non-GAAP Financial Information This presentation may use the non-GAAP financial measures of “free cash flow,” earnings per share (EPS) on an ongoing basis, and Return on Capital (ROC). We define free cash flow as the total of cash flows from operating activities and investing activities. A non-GAAP EPS financial measure, which we refer to as on-going EPS, excludes certain after-tax items that we do not consider part of ongoing operations, which are identified in the reconciliation. ROC means net income (without the effect of certain items) exclusive of after-tax interest expenses, divided by the average of the beginning year and ending year net capital employed, as defined in the reconciliation. Our presentation of non-GAAP financial measures is intended to supplement investors’ understanding of our operating performance. These non-GAAP financial measures are not intended to replace net income (loss), cash flows, financial position, or comprehensive income (loss), as determined in accordance with accounting principles generally accepted in the United States. Furthermore, these non-GAAP financial measures may not be comparable to similar measures used by other companies. The non-GAAP financial measures used in this presentation are reconciled to the most directly comparable financial measures calculated and presented in accordance with GAAP, which can be found at the end of this presentation. Trademarks Roundup, Roundup Ready, Roundup RReady2Yield, Bollgard, Bollgard II, YieldGard, YieldGard Corn Borer and Design, YieldGard Rootworm and Design, Asgrow and the A Design, DEKALB and the Winged Ear Design, Monsanto Imagine and the Vine Design, Asgrow, DEKALB, Monsanto Choice Genetics, Posilac, Processor Preferred, Vistive, Stoneville and Seminis are trademarks owned by Monsanto Company and its wholly-owned subsidiaries and are italicized the first time they appear in this presentation. Mavera™ is a trademark of Renessen. © 2006 Monsanto Company 3
  4. 4. OVERVIEW U.S., Brazil and Argentina Account for More Than 90 Percent of World Grain Trade GLOBAL VIEW - 2010 HORIZON EUROPE UNITED STATES KEY TRENDS KEY TRENDS BIO-DIESEL DRIVES ETHANOL DRIVES OILSEED DEMAND ADDITIONAL CORN EU REMAINS WORLD’S DEMAND PRINCIPAL DESTINATION SOYBEANS EVOLVE FOR SOYBEAN MEAL INTO A HIGHER VALUE, CHINA: NET IMPORTS SPECIALTY MARKET 40 30 METRIC TONS (M) 20 10 0 ASIA PACIFIC 2005 2010 -10 KEY TRENDS CORN SOY CHINA BECOMES A NET IMPORTER OF CORN AND SOUTH AMERICA SOYBEAN IMPORTS ACCELERATE KEY TRENDS GROWING WEALTH & SOYBEAN ACREAGE POPULATION DRIVES INCREASES GRAIN DEMAND DEMAND FOR CORN INCREASES FOR DOMESTIC FEED Source: U.S.D.A. Foreign Agricultural Service, ABIOVE, Independent Economists & Monsanto Estimates 4
  5. 5. COMMERCIAL Farmers ‘Buy Yield,’ Creating Opportunity for Seeds and Traits Growth FARMERS’ DECISION EQUATION MONSANTO’S POSITION: CORN SEED Retail brands (GENETIC GAIN) The starting point of all agriculture; Regional brands farmers need to maximize ‘genetics’ in seed for yield +TECHNOLOGY Licensing + ‘Above ground’ protection (% OF GENETIC GAIN PRESERVED) Technology is used to protect and ‘Below ground’ protection maximize the yield potential of the seed = MAXIMUM YIELD Weed control system =POTENTIAL The elegance of a seed and trait approach is that the seed is the package and traits can be ‘stacked’ for maximum effect The basic equation represents the In 2005, Monsanto introduced the first maximum yield potential multiplied by the triple-stack of biotech traits percent of that yield preserved by technology 5
  6. 6. COMMERCIAL Breeding and Biotechnology Combine to Advance Harvested Yield to the Next Level FOCUS: YIELD WHAT MATTERS TO FARMERS IS THE YIELD AT HARVEST, WHICH IS A FUNCTION OF HOW MUCH POTENTIAL A SEED HAS AND HOW IT’S GENETIC POTENTIAL (FUTURE) PROTECTED: GENETIC POTENTIAL NET REALIZED YIELD WITH PERCENT OF GENETIC GAIN FUTURE PROTECTION X PRESERVED OPPORTUNITIES PROTECTION AND ENHANCEMENT IMPROVED NITROGEN ADVANCES BREEDING UTILIZATION NET REALIZED YIELD DROUGHT TOLERANCE SECOND-GENERATION INSECT CONTROL GENETIC POTENTIAL (CURRENT) INSECT PRESSURE NET REALIZED YIELD WITH CURRENT WEED PRESSURE PROTECTION NATURAL YIELD NUTRIENT DEFICIENCY SUPPRESSION BELOW-GROUND CURRENT YIELD WATER DEFICIENCY INSECT CONTROL PROTECTION GENETIC POTENTIAL ABOVE-GROUND PRESERVED INSECT CONTROL THROUGH BIOTECH TRAITS AND PRODUCTION WEED-CONTROL ADVANCES TRAITS SEED NET REALIZED YIELD MANUFACTURING WITH NO PROTECTION 6
  7. 7. COMMERCIAL Opportunity to Improve Global Corn Yields Comes Through Investments in Technology CORN YIELD TRENDS (BUSHELS PER ACRE) CORN YIELD HIGHLIGHTS 1990 2000 2005 U.S. WORLD AVERAGE 59 70 75 MOST TECHNOLOGICALLY ADVANCED CORN MARKET SIGNIFICANT PUBLIC AND PRIVATE INVESTMENT IN BREEDING AND BIOTECH UNITED STATES 113 137 149 ARGENTINA CONSOLIDATED GERMPLASM POOL AND ARGENTINA 60 93 109 TECHNOLOGY ADOPTION HAVE LED TO YIELD INCREASES BRAZIL CHINA 74 78 80 YIELDS ARE SIGNIFICANTLY BELOW WORLD AVERAGE YIELDS POISED TO IMPROVE BECAUSE OF BRAZIL 33 47 54 BREEDING INVESTMENTS INDIA INDIA 23 29 31 LARGE, FRAGMENTED MARKET, MUCH OF WHICH IS LOW TECHNOLOGY AND SUBSISTENCE FARMING SUB-SAHARAN 22 24 25 AFRICA Source: Doane Forecast 7
  8. 8. COMMERCIAL Monsanto’s Global Germplasm and Breeding Programs Pave Way for Future Share Growth Internationally SCORECARD 10 COUNTRIES REPRESENT 80% OF THE GERMPLASM GLOBAL BRANDED MARKET SHARE MARKET VALUE CHANGE FY2004 FY2005 FY2006F (’04-’06) IN THOSE 10 NORTH AMERICAN REGION 14% 16% 19% +5% COUNTRIES, MONSANTO HOLDS No. 1 POSITION IN UNITED STATES 14% 16% 18% +4% SIX EUROPE-AFRICA REGION 13% 15% 15% +2% STRENGTHS: FRANCE 10% 14% 15% +5% IN EUROPE-AFRICA ITALY 14% 17% 21% +7% REGION, GROWTH WAS STRONGEST ACROSS HUNGARY 26% 30% 32% +6% LARGEST MARKETS TURKEY 17% 23% 23% +6% IN ASIA-PACIFIC AND SOUTH AFRICA 38% 44% 49% +11% LATIN AMERICA REGIONS, MARKET ASIA-PACIFIC REGION 35% 37% 35% FLAT LEADERSHIP WAS INDIA 29% 34% 35% +6% MAINTAINED AND PROFITABILITY GREW LATIN AMERICA REGION 37% 38% 38% +1% CHALLENGES: MEXICO 58% 57% 60% +2% IN BRAZIL, PRUDENT BRAZIL 35% 35% 34% -1% CREDIT POLICIES ARE ARGENTINA 35% 37% 35% FLAT LIMITING SHARE GROWTH OPPORTUNITIES 8
  9. 9. COMMERCIAL Corn Market Share Gains Still To Fully Reflect Power of Molecular Breeding Application CYCLE 1: CYCLE 2: CYCLE 3: INTEGRATION OF APPLICATION OF MOLECULAR SELECTION POWER OF PROGRESSION GLOBAL GERMPLASM BREEDING TO SELECTION MOLECULAR BREEDING OF BREEDING TECHNOLOGY IN THE • MOLECULAR BREEDING DOUBLES • PREDICTIVE COMBINATIONS • ASSEMBLED 36 MAJOR CORN COMMERCIAL GENETIC POTENTIAL VERSUS ALLOW MORE EFFICIENT BREEDING PROGRAMS IN 12 PORTFOLIO CONVENTIONAL BREEDING BREEDING COUNTRIES • BY 2006, FIRST MOLECULAR • MOLECULAR BREEDING BREEDING HYBRIDS ENTER ACCELERATES TRAIT COMMERCIAL PORTFOLIO INTEGRATION BY SHORTENING ‘BACKCROSSING’ CYCLES OPPORTUNITY ACTIONS TAKEN COMPETITIVE •APPLY MOLECULAR BREEDING •IN U.S. , BY 2006, FIRST •FIRST INTRA-COMPANY ADVANTAGE TO U.S. MOLECULAR BREEDING CROSSES; BY CYCLE 3, BUILT ON OUR HYBRIDS ENTER COMMERCIAL MORE THAN 50% OF INVESTMENTS •APPLY MOLECULAR BREEDING PORTFOLIO HYBRIDS IN THE U.S. IN EUROPE PORTFOLIO MADE THROUGH •IN EUROPE, BY 2008, FIRST •APPLY MOLECULAR BREEDING INTRA-COMPANY CROSSES MOLECULAR BREEDING RESULTS FROM TEMPERATE TO HYBRIDS ENTER COMMERCIAL TROPICAL MARKETS, SUCH AS PORTOLIO BRAZIL AND ASIA •IN BRAZIL AND ASIA, BY 2009, FIRST MOLECULAR BREEDING HYBRIDS ENTER COMMERCIAL PORTFOLIO 2001 2002 2003 2004 2005 2006 2007 2008 2009 9
  10. 10. COMMERCIAL Yield Advantages Fuel Market Share Growth in Europe FOCUS: EUROPE COMMERCIAL OPPORTUNITY CORN GERMPLASM 160 2005 CORN YIELD MONSANTO COMPETITOR BUSHELS PER ACRE 150 140 130 120 MARKET FACTS 110 ACRES 2005 2006F 100 CORN 25.5M 26M 85 90 95 100 105 110 115 MATURITY ZONES IN DAYS OILSEEDS 27M 28M CORN BORER INSECT BREEDING GAINS HAVE ESTABLISHED A YIELD ADVANTAGE FOR PROBLEM IS MONSANTO’S EUROPEAN GERMPLASM SIGNIFICANT IN EUROPE OVER THE LAST 3 YEARS, OUR BRANDS HAVE GAINED 7 MARKET OILSEED ACRES SHARE POINTS IN ITALY AND 5 IN FRANCE INCLUDE SUNFLOWER, STRATEGIC ALLIANCES AND HYBRID LICENSING INCREASE OILSEED RAPE, AND GENETIC FOOTPRINT FOR FUTURE TRAIT PENETRATION SOYBEANS 10
  11. 11. COMMERCIAL Market Leadership In Corn Maintained While Refreshing Portfolio Mix Through Advanced Breeding FOCUS: BRAZIL COMMERCIAL OPPORTUNITY CORN GERMPLASM CORN PORTFOLIO MIX 100% 21% 34% 80% 25% ~2X 60% INCREASE MARKET FACTS 38% 40% 54% ACRES 2005 2006F 20% CORN 20M 20M 28% 0% SOYBEANS 52M 50M 2003 2006F SOYBEAN YIELDS HIGH TIER MEDIUM TIER LOW TIER SUPERIOR TO U.S. AVERAGES CORN YIELDS LAG U.S. AVERAGES PORTFOLIO MIX SHIFT DROVE HIGHER YIELDS FOR FARMERS AND INCREASED PROFITABILITY FOR MONSANTO BRANDED BUSINESS COUPLED WITH LICENSING AGREEMENTS WITH AGROMEN AND AGROESTE EXTEND PLATFORM FOR FUTURE TRAIT PENETRATION 11
  12. 12. COMMERCIAL Seminis to Leverage Portfolio, Pricing and Molecular Breeding to Create New Growth FOCUS: SEMINIS VALUE ENHANCEMENT TIMELINE OVER THE MID-TERM, SEMINIS WILL UNDERGO THREE PHASES OF EXECUTION EN ROUTE TO UNLOCKING ADDITIONAL VALUE + + OPERATIONAL EXCELLENCE NEW VALUE CREATION PIPELINE ADVANCEMENT BY END OF FY 2007 BY END OF FY 2008 BY END OF FY 2010 PRIORITIZE PRODUCT PORTFOLIO IDENTIFY AND IMPLEMENT COMMERCIALIZE FIRST BY FOCUSING ON 20 – 25 KEY OPPORTUNITIES TO PRICE PRODUCTS HYBRIDS DEVELOPED BY CROPS THAT DRIVE PROFITABILITY TO VALUE MOLECULAR BREEDING ASSEMBLE GENETIC MAPS FOR KEY BUILD BUSINESS MODELS TO CREATE LAUNCH SUCCESSION OF CROPS AND CAPTURE DOWNSTREAM VALUE CONSUMER BENEFIT PRODUCTS OPPORTUNITIES ENHANCE R&D CAPABILITY AND DEPLOY MOLECULAR MARKERS ENHANCE PRODUCT QUALITY AND FOR AGRONOMIC AND CONSUMER REDUCE COSTS THROUGH BENEFITS MANUFACTURING AND LOGISTICAL IMPROVEMENTS INTEGRATE AND STREAMLINE BACK –OFFICE OPERATIONS AGGRESSIVELY MAKE HYBRID CONVERSIONS IN STRATEGIC CROPS 12
  13. 13. COMMERCIAL Expanding Line of Cantaloupe Offers Improved Post- Harvest and Fresh-Processing Quality KEY MARKET AREAS EUROPE N.AMERICA ENHANCED CANTALOUPE .2M .6M ACRES CREATING VALUE $ 24 M $ 86 M AVAILABLE SEED MARKET PROJECT OVERVIEW 4% 2% PERCENT PENETRATED MULTI-GENERATIONAL: PHASE III THROUGH LAUNCH Not as well as Better than As expected expected expected Quality Horticultural Performance New Hybrids (white flesh, orange flesh, green flesh) OBSERVATIONS • Consistent quality and flavor, consumer experience • Higher marketable yield and profitability • Better shelf life and excellent flavor • High sugars even during challenging winter harvest months 3108 DISCOVERY PHASE III PHASE I PHASE II PHASE IV LAUNCH Adv. Development Proof of Concept Early Development Pre-Launch 13
  14. 14. COMMERCIAL Existing Biotech Traits Set Up Three Pathways for Mid-Term Growth Internationally EXAMPLE: BIOTECH TRAITS IN BRAZIL 50M ACRES OF SOYBEANS OPPORTUNITY: AND 20M ACRES OF CORN PENETRATION AND EXPANSION IN 2006, ~25M ROUNDUP CURRENT READY SOYBEANS ACRES STATUS: IN CORN, NO BIOTECH ACRES WERE PLANTED EXAMPLE: COTTON TRAITS IN AUSTRALIA ROUNDUP READY FLEX OPPORTUNITY: WITH BOLLGARD II STACK STACKING LAUNCHES IN FY 2007 80% OF ALL ACRES HAVE A TRAIT. OVER HALF OF CURRENT ALL ACRES WITH AT STATUS: LEAST ONE TRAIT ARE STACKED EXAMPLE: SECOND-GENERATION COTTON TRAITS IN INDIA BOLLGARD II LAUNCHES IN OPPORTUNITY: 2006 ON LIMITED ACRES MULTI-GENERATION CURRENT 6M+ ACRES TARGETED TO STATUS: HAVE BOLLGARD IN 2006 14
  15. 15. COMMERCIAL Market Potential for International Biotech Traits by 2010 Highlights Continued Growth Potential SOYBEANS COTTON CORN ROUNDUP BOLLGARD ROUNDUP ROUNDUP YIELDGARD YIELDGARD KEY MARKETS READY AND READY READY CORN BORER ROOTWORM BOLLGARD II CORN 2 FLEX BRAZIL 50M 3M 2M 20M 15M 5M ARGENTINA 35M - - 5M 4M 1M INDIA - 10-15M 10-15M 3 – 5M 3 – 5M - EUROPE 1M - - 24M 8M 5M AFRICA 0.2M 11M 10M 6M 4M - AUSTRALIA - 0.5M-0.8M 0.5M-0.8M - - - TOTAL KEY 86.2M 24.5–29.8M 22.5-27.8M 58-60M 34-36M 11M MARKETS 54% 0% 15% <1% 17% 0% BIOTECH ACRES PLANTED 2005 REMAINING AVAILABLE ACRES 15
  16. 16. COMMERCIAL Roundup Ready Soybean Penetration Accelerates, Corn Trait Adoption Poised for Solid Growth FOCUS: BRAZIL COMMERCIAL OPPORTUNITY SOYBEAN TRAITS CORN TRAITS MARKET OPPORTUNITY=50M 50 40 ACRES IN MILLIONS 30 20 WINTER CORN 10 GROWING REGION 0 SUMMER CORN 2004 2005 2006F GROWING REGION CURRENT MARKET POTENTIAL IS 50M; UPSIDE OPPORTUNITY FOR ADDITIONAL 10- 30M ACRES TO COME UNDER CULTIVATION IN 2006, SAVED SEED ESTIMATED AT 20M BRAZIL HAS TWO CORN-GROWING SEASONS ACRES AND NEW SEED ESTIMATED AT 5M YIELDGARD CORN BORER AND ROUNDUP READY VALUE CAPTURE SYSTEM FOR SAVED CORN 2 HAVE BEEN SUBMITTED FOR SEED IS FUNCTIONING AT 97% INTEGRITY REGULATORY APPROVAL 16
  17. 17. COMMERCIAL Momentum in Stacking Cotton Traits in Australia Extends Margin Potential Per Acre FOCUS: AUSTRALIA COMMERCIAL OPPORTUNITY COTTON TRAITS 700 1.60 TRAIT INTENISTY PER ACRE 1.40 ACRES IN THOUSANDS 600 1.20 500 1.00 400 0.80 300 0.60 200 0.40 MARKET FACTS 100 0.20 0 0.00 ACRES 2005 2006 2004 2005 2006 SINGLE TRAIT TRAIT INTENSITY .5M - .5M - DOUBLE STACK COTTON .8M .8M BOLLWORM IS A MORE ROUNDUP READY FLEX WILL LAUNCH IN AUSTRALIA AND THE SIGNIFICANT INSECT U.S. IN CALENDAR YEAR 2006 PEST THAN IN THE U.S. RETAIL VALUE PER ACRE HAS INCREASED MORE THAN 4 TIMES FROM 2004 TO 2006 BECAUSE OF STACKING AND SECOND- GENERATION TRAIT UPGRADES FARMER SAVES $35 - $40 PER ACRE USING MONSANTO’S STACK OF ROUNDUP READY FLEX WITH BOLLGARD II VERSUS CONVENTIONAL SYSTEMS 17
  18. 18. COMMERCIAL Bollgard II Cotton Launches and Expands Insect Spectrum, Corn Traits Submitted for Regulatory Approval FOCUS: INDIA COMMERCIAL OPPORTUNITY COTTON TRAITS 10 BOLLGARD ADOPTION 8 MILLIONS ACRES IN 6+ Million 6 4 2 MARKET FACTS 0 2004 2005 2006F ACRES 2005 2006F BOLLGARD II LAUNCHES ON LIMITED ACRES IN 2006 LEADING TO CORN 3 -5M 3 –5M EVENTUAL REPLACEMENT OF BOLLGARD BOLLGARD BENEFITS: 10M - 10M – COTTON FARMER NET RETURN INCREASED BY 163% 15M 15M OVERALL COTTON YIELD IMPROVED BY 58% MANUAL FAMILY PESTICIDE LOADING REDUCED BY 50% FARMING PRACTICES 60 PERCENT OF FARMS CORN TRAITS < 2.5 ACRES SIGNIFICANT OPEN CORN BORER, WEEDS AND DROUGHT CONDITIONS IN NORTHERN POLLINATED ACRES OF INDIA ARE SIGNIFICANT PROBLEMS COTTON AND CORN REPRESENT YIELDGARD CORN BORER AND ROUNDUP READY CORN 2 ADDITIONAL SUBMITTED FOR REGULATORY APPROVAL OPPORTUNITY FOR RAPID MARKET SHARE GROWTH OF 15 POINTS IN 5 YEARS HAS HYBRID CONVERSION SOLIDIFIED BASE FOR TRAIT LAUNCHES 18
  19. 19. DISCOVERY PHASE I PHASE II PHASE III PHASE IV PIPELINE Proof Of Concept Early Advanced Pre-launch Gene/Trait 2006 Pipeline Development Development Identification AS OF JANUARY 1, 2006 Roundup Ready Flex cotton Roundup RReady2Yield soybeans Roundup RReady2Yield canola Dicamba-tolerant soybeans Dicamba-tolerant cotton 2nd-Gen YieldGard Rootworm 2nd-Gen YieldGard Corn Borer Insect-protected soybeans YieldGard Rootworm II FARMER Soybean nematode-resistance Bollgard III Drought-tolerant corn 2nd-Gen Drought-tolerant corn Higher-yielding canola Drought-tolerant soybeans Drought-tolerant cotton Higher-yielding corn Nitrogen utilization corn Higher-yielding soybeans Mavera™ High-value corn with lysine1 Mavera™ I High-value soybeans1 PROCESSOR Mavera™ II High-value soybeans1 2nd-Gen High-value corn with lysine1 Feed Corn with balanced proteins1 High oil soybeans for processing1 CONSUMER Improved-protein soybeans Vistive II Low Lin – Mid Oleic soybeans Vistive III Low Lin – Mid Oleic – Low Sat soybeans Omega-3 soybeans 19 1. These product candidates are in the Renessen pipeline. Renessen is a Monsanto/Cargill joint venture
  20. 20. TECHNOLOGY Multi-Generational Drought-Tolerant Corn Is Advancing Closer to Commercial Reality with Global Applications KEY MARKET ACRES EUROPE BRAZIL ARGENTINA 24M 30M 6M AVAILABLE MARKET DROUGHT TECHNOLOGY 0% 0% 0% PERCENT PENETRATED DROUGHT MAP WITH TRAIT WITHOUT TRAIT WITH TRAIT WITHOUT TRAIT SOUTH AMERICA & EUROPE AREAS WITH CONSISTENT DROUGHT STRESS AND IRRIGATION RESULTS REQUIREMENTS AREAS WITH INCONSISTENT DROUGHT STRESS o C 32 34 40 BROAD ACRE DROUGHT TOLERANCE WATER USE ESTABLISHED THROUGH PLANT EFFICIENCY PHYSIOLOGY (PERFORMANCE) OVER THREE YEARS DISCOVERY PHASE I PHASE II PHASE IV LAUNCH PHASE III Proof of Concept Early Development Pre-Launch Adv. Development 20
  21. 21. TECHNOLOGY Second-Generation Roundup RReady2Yield Soybeans Enhances Yield Globally KEY MARKET ACRES U.S. BRAZIL ARGENTINA Roundup RReady2Yield 70M 50M 35M AVAILABLE MARKET Soybeans 0% 0% 0% PERCENT PENETRATED TECHNOLOGY IMPROVEMENT WITH UP TO 5 BUSHEL PER ACRE YIELD IMPROVEMENT, ROUNDUP RREADY2YIELD WILL SIGNIFICANTLY ADVANCE TRADITIONAL BREEDING GAINS PROVIDES PLATFORM FOR FUTURE SOY TECHNOLOGIES, INCLUDING THIRD-GENERATION OF WEED CONTROL IN SOYBEANS RESULTS RESEARCH UNDER WAY ON POTENTIAL FOR ADDITIONAL INSURANCE FOR ASIAN SOYBEAN RUST ASIAN RUST SOYBEAN RUST IS A FUNGAL PATHOGEN WITH MORE THAN 40 SPECIES RUST PREDOMINANTLY AFFECTS SOYBEANS IN BRAZIL AND ARGENTINA YIELD LOSS IS BETWEEN 10% - INDICATIONS ARE ROUNDUP RREADY2YIELD SOYBEANS 80% PER YEAR GLOBALLY DEMONSTRATE UP TO 5 BUSHEL PER ACRE YIELD FUNGICIDES FOR RUST CONTROL COST UP TO $25 PER ACRE ADVANTAGE OVER COMPARABLE ROUNDUP READY VARIETIES 21
  22. 22. TECHNOLOGY Biodiesel Production Will Drive Incremental Vegetable Oil Demand EU 25 BIODIESEL MARKET OUTLOOK BIODIESEL MARKET IN EU BY 2010, BIOFUEL 20 SHOULD REPRESENT 5.75% 18 MILLIONS OF TONS OF TOTAL 16 TRANSPORT FUEL 14 USED IN EU 12 BY 2010, OVER 10 HALF OF 8 VEGETABLE OIL PRODUCED IN EU 6 WILL BE USED FOR 4 BIODIESEL 2 0 2005 2006F 2007F 2008F 2009F 2010F BIODIESEL RAPESEED SOYOIL FOUR PATHS TO GROWTH FOR MONSANTO IMPROVE OIL YIELD PER ACRE –MOLECULAR BREEDING DOUBLES THE HISTORICAL RATE OF YIELD GAIN FOR SOYBEANS –PIPELINE PRODUCTS LIKE HIGH OIL AND ROUNDUP RREADY2YIELD SOYBEANS SHOULD PROVIDE YIELD BENEFITS MARKET GROWTH –OILSEED RAPE ACREAGE HAS POTENTIAL TO INCREASE FROM 13M TO 20M PROCESSOR BENEFITS –PROCESSOR PREFERRED OILSEED SHOULD RESULT IN DOWNSTREAM VALUE BECAUSE OF HIGHER QUALITY GRAINS GLOBAL GROWTH –SUPPLY CONSTRAINTS IN EU MAY SPILL OVER INTO OPPORTUNITIES FOR BRAZILIAN SOYBEANS, NORTH AMERICAN CANOLA AND RENESSEN’S CORN OIL Source: Estimates from EU targets under Directive 2003/30/EG, Oil World and Monsanto Estimates 22
  23. 23. SUMMARY Foundation Created in International Operations Sets Stage for Seed and Trait Expansion CORN: GLOBAL BREEDING PROGRAMS ARE FUELING GROWTH IN EUROPE- AFRICA AND SUPPORTING LEADERSHIP POSITIONS IN ASIA-PACIFIC AND LATIN AMERICA BRANDED SHARE COUPLED WITH LICENSING AGREEMENTS ESTABLISHES FOUNDATION FOR FUTURE TRAIT LAUNCHES COTTON: TRAIT PENETRATION IS ACCELERATING IN ASIA-PACIFIC PREPARING WAY FOR MULTIPLE MARGIN OPPORTUNITIES WITH STACKING AND SECOND-GENERATION TECHNOLOGY LAUNCHES SOYBEANS: ROUNDUP READY SOYBEAN ACRES DOUBLED IN BRAZIL IN 2006 AND ARE POISED TO REACH 50 MILLION ACRES BY 2010 WITH A SECOND- GENERATION TECHNOLOGY LAUNCH ON THE HORIZON SEMINIS: BUILDING BUSINESS MODELS TO CREATE AND CAPTURE VALUE DOWNSTREAM IN PREPARATION FOR COMMERCIALIZATION OF FIRST HYBRIDS DERIVED FROM MOLECULAR BREEDING 23

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