BRETT BEGEMANN
EXECUTIVE VICE PRESIDENT


MONSANTO BIENNIAL
U.S. INVESTOR DAY

NOVEMBER 8, 2007



                       ...
OVERVIEW


   Upgrade to Roundup RReady2Yield in Soybeans Contributes
   to Doubling Gross Profit Over Next Five Years

  ...
SOYBEANS


Upgrade to Roundup RReady2Yield Drives U.S. Soybean
Seed and Traits Gross Profit Expansion Through 2012

      ...
SOYBEANS


U.S. Soybean Seed Share to Continue to Grow Organically



                                          U.S. SOYBE...
SOYBEANS


 Same Peak Share Expected for Roundup RReady2Yield;
 Alternative Traits Assumed in Marketplace
            U.S....
SOYBEANS


  Preparations Under Way for Large Scale U.S. Launch of
  Roundup RReady2Yield
                                ...
SOYBEANS


Upgrade to Roundup RReady2Yield Expected More than
Compensate for Competitive Offerings

      U.S. SOYBEAN SEE...
SOYBEANS


 Roundup Ready Soybeans Well Established in U.S.;
 Brazil Mirroring U.S. Penetration Curve

CROP:        Soybea...
SOYBEANS


 Insect-Protected Soybeans in Development for Heavily Infested
 Latin America Market
                          ...
SOYBEANS


  Vistive III Builds Off of Vistive Low-Lin Base with
  Improved Oil Profile
                                  ...
SOYBEANS


 Soybean Value Upgraded with Roundup RReady2Yield,
 Modified Oil Traits and Insect Protection

                ...
SOYBEANS


Relative Contribution of U.S. and Ex-U.S. Should Be
Consistent in Growing Soybean Seed and Trait Business

  GL...
COTTON


     Cotton Contributes to Doubling of Gross Profit via Breeding
     Investment and Conversion to Second-Generat...
COTTON


  Delta and Pine Land Share Loss in 2007 Reinforces Need
  for Reinvigorated Cotton Breeding Program


          ...
COTTON


Delta and Pine Land’s Global Breeding Strategy Focused on
Yield and Fiber Improvement

                          ...
COTTON


  U.S. Cotton Trait Acres Shift with Total Planted Cotton
  Acres; Opportunity to Upgrade to Second-Generation

 ...
COTTON


 Planned Upgrade to Second-Generation Cotton Technology
 in U.S. Focused on Southern Markets

                   ...
COTTON


Bollgard Cotton Penetration in India Nearly Doubles in 2007;
Creates Platform for Second-Generation Traits

CROP:...
COTTON


 Launch of Roundup Ready Flex in India Would Further
 Improve Grower Profitability

                             ...
COTTON


Second-Generation Trait Conversion Accelerates Globally to
Expand Gross Profit Contribution of Cotton

          ...
OVERVIEW


     Given Growth Opportunities, Monsanto Has Potential to More
     Than Double Gross Profit Over the Next Fiv...
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monsanto 11-08-07-3

  1. 1. BRETT BEGEMANN EXECUTIVE VICE PRESIDENT MONSANTO BIENNIAL U.S. INVESTOR DAY NOVEMBER 8, 2007 1
  2. 2. OVERVIEW Upgrade to Roundup RReady2Yield in Soybeans Contributes to Doubling Gross Profit Over Next Five Years MONSANTO GROSS PROFIT 2012 GROWTH RANGE GROWTH TARGET Gross profit targeted to double $9,000 from 2007 through 2012 STRATEGIC PLAYBOOK $8,000 $7,000 Soybeans GROSS PROFIT (IN MILLIONS) 1. Launch of Roundup $6,000 RReady2Yield soybeans $5,000 2. Continued penetration of Roundup Ready soybeans $4,000 in Brazil to create platform $3,000 for insect-protected Roundup RReady2Yield $2,000 soybeans $1,000 3. Launch enhanced modified oils platform $0 4. Continue to develop and 2004 2007 2012 MILESTONES launch pipeline traits with 2010 2007 more stacked offerings Gross margin Base Gross target: 52-54% Profit: $4,286M ONGOING EPS GROWTH: MID-TO-HIGH TEENS 2
  3. 3. SOYBEANS Upgrade to Roundup RReady2Yield Drives U.S. Soybean Seed and Traits Gross Profit Expansion Through 2012 U.S. SOYBEAN SEED AND TRAITS GROSS PROFIT BY CHANNEL INDEX=2004 2004 2007 2012F >2X OVER 2004 INDEX Trait licensing outside Holden’s/Corn States 3
  4. 4. SOYBEANS U.S. Soybean Seed Share to Continue to Grow Organically U.S. SOYBEAN BRANDED AND LICENSED SEED SHARE 100% U.S. SOYBEAN SEED MARKET SHARE 90% CORN STATES ASI ASGROW LICENSEES 80% 70% (PERCENTAGE) 60% 50% 40% 30% 20% 10% 0% 2004 2005 2006 2007 2012 TARGET 4
  5. 5. SOYBEANS Same Peak Share Expected for Roundup RReady2Yield; Alternative Traits Assumed in Marketplace U.S. ROUNDUP RREADY2YIELD OPPORTUNITY: BEYOND 2010 75 2010 + 70 20M 60-70M 65 60 • In 2009/2010, 61M 55 Roundup RReady2Yield 50 starts to access 40-50M M ACRES 45 opportunity of 40 40- 50M U.S. 35 acres 30 • Roundup 25 RReady2Yield 20 becomes platform for 15 stacking 10 pipeline traits, 5 such as 0 modified oils 2007 ROUNDUP TOTAL 2010 ASSUMED TOTAL 2010+ and high yield READY ROUNDUP READY COMPETITIVE ROUNDUP PENETRATION OPPORTUNITY ACRES ON RREADY2YIELD ALTERNATIVE ACREAGE PLATFORM OPPORTUNITY ROUNDUP RREADY2YIELD ROUNDUP READY BASELINE OPPORTUNITY 5 Source: Company estimates
  6. 6. SOYBEANS Preparations Under Way for Large Scale U.S. Launch of Roundup RReady2Yield ROUNDUP RREADY2YIELD SOYBEANS: CROP: Soybeans LAUNCH PLANS Launch OBJECTIVE: Roundup U.S. Full-Scale RReady2Yield Launch Target: P R O JE CT 5- 6M Acres 2008 STATUS U.S. Controlled • Consistent 7-11% yield Commercial advantage with Roundup Release Target: RReady2Yield 1- 2M Acres • USDA, EPA and FDA Grower level marketing, awareness and trial approvals received; awaiting key export Licensee breeding approvals • Pre-launch activities Industry coordination and communications under way • American Soybean Association and key agri-food PRICING stakeholders • Yield improvement shared Pursuit of export approvals in Japan, China, with grower; average 5 Europe and Mexico year soybean commodity Branded and licensed seed production price approximately $6.40 2007 2008 2009 2010 per bushel1 6 1. Source: NASS, USDA data 2003 to August 2007
  7. 7. SOYBEANS Upgrade to Roundup RReady2Yield Expected More than Compensate for Competitive Offerings U.S. SOYBEAN SEED AND TRAITS GROSS PROFIT BY CHANNEL INDEX=2004 2004 2007 2012F >2X OVER 2004 INDEX Trait licensing outside Holden’s/Corn States 7
  8. 8. SOYBEANS Roundup Ready Soybeans Well Established in U.S.; Brazil Mirroring U.S. Penetration Curve CROP: Soybeans ROUNDUP READY SOYBEANS: Grow PENETRATION AS PERCENT OF OPPORTUNITY Roundup OBJECTIVE: Ready penetration 120% in Brazil 2008 STATUS 100% • Brazil Roundup Ready 80% soybean penetration currently at 50% of 60% opportunity 40% 50% penetration in 2012 OUTLOOK Brazil consistent with U.S. trend in 20% • Potential to penetrate year four 95% of the acres in 0% Brazil at peak, establishing footprint '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 for transition to insect- U.S. Roundup Ready soybeans U.S. Roundup Ready soybeans protected Roundup Brazil Roundup Ready soybeans Brazil Roundup Ready soybeans RReady2Yield soybeans 8
  9. 9. SOYBEANS Insect-Protected Soybeans in Development for Heavily Infested Latin America Market KEY MARKET ACRES BRAZIL AVAILABLE MARKET 50-60M Insect-Protected Soybeans PERCENT PENETRATED 0% LEPIDOPTERAN CROP: Soybeans INSECT Launch insect- INFESTATION OBJECTIVE: protected soybeans BRAZIL LOW HIGH 2008 STATUS • Insect-protected soybeans in Phase III of development INA • Roundup RReady2Yield BENEFITS ACREAGE OPPORTUNITY NT testing in tropical INSECT- germplasm GE • 4%+ yield increase vs. 50-60M acres PROTECTED insecticide-treated infested with 2012 OUTLOOK AR SOYBEANS soybeans lepidopteran insects in • Growers currently • Plan to launch as stack in Brazil spray twice per season, Brazil at cost of $5.70/acre for insecticide and one application1 ROUNDUP • 7-11% yield increase in 50-60M acres RREADY2YIELD U.S. germplasm; in Brazil tropical germplasm testing in progress 9 1. Source: Kleffmann AMIS for insecticide cost and FNP Agrianual 2007 for spraying cost
  10. 10. SOYBEANS Vistive III Builds Off of Vistive Low-Lin Base with Improved Oil Profile SATS OLEIC LINOLEIC LINOLENIC 18:0 / 16:0 CROP: 18:1 18:2 18:3 Soybeans Standard Soybean Launch OBJECTIVE: Vistive III Target: Vistive III 2008 STATUS • Vistive III in Phase II; lead event continues to meet product composition RETAIL targets OIL 2007 ACREAGE VALUE/ PROFILE BENEFITS STATUS OPPORTUNITY ACRE P R O JE CT • Strong food company demand Vistive Low • < 3% 1.5M •4-5M <$10 • Vistive low-lin planted on linolenic linolenic, planted •U.S. only zero trans-fat acres in 1.5M acres in 2007 label U.S. 2012 OUTLOOK Vistive III •Low •Composition Phase II •5-30M >$10 - • Vistive III being prepared linolenic target of olive <$30 •U.S. only for launch in channel oil; 55-75% •Increased oleic, <7% created by Vistive low-lin oleic saturates •Low • Bifurcation of soybean •60% reduction saturates market: U.S. serves high- in saturated value oil market; South fat and America, greater transfat commodity needs 10
  11. 11. SOYBEANS Soybean Value Upgraded with Roundup RReady2Yield, Modified Oil Traits and Insect Protection SOYBEAN UPGRADE UNDER WAY; CROP: Soybeans MARKET SEGMENTATION BY MID NEXT DECADE Growth via OBJECTIVE: new traits MODIFIED OIL U.S. SOYBEAN VALUE MARKET TRAITS 2008 STATUS COMPETITIVE • Roundup • $13+/acre for • Roundup Ready PLATFORM RReady2Yield Roundup soybeans at 95% in market for tolerance ROUNDUP penetration in U.S., 2+ years plus 7-11% RREADY2YIELD 50% in Brazil yield • Vistive III and other modified • Oil premium • Roundup oil traits being RReady2Yield U.S. SOYBEANS: launched approved by USDA, 60-70M ACRE MARKET ROUNDUP EPA and FDA; key RREADY2YIELD AND export approvals INSECT PROTECTED pending BRAZIL SOYBEAN VALUE MARKET 2012 OUTLOOK • Insect-protected •$2.50-$3.00+ • Five trait stacks in ROUNDUP READY Roundup per acre for soybeans feasible, RReady2Yield Roundup with Roundup being launched tolerance plus RReady2Yield as base 7-11% yield BRAZIL SOYBEANS: trait for all •Insecticide 50-60M ACRE MARKET replacement 11
  12. 12. SOYBEANS Relative Contribution of U.S. and Ex-U.S. Should Be Consistent in Growing Soybean Seed and Trait Business GLOBAL SOYBEAN SEED AND TRAITS GROSS PROFIT BY GEOGRAPHY INDEX=2004 2004 2007 2012F >2X OVER 2004 INDEX BRAZIL BRAZIL ROUNDUP ROUNDUP ROUNDUP READY READY SOYBEAN RREADY2YIELD SOYBEAN AT 50% LAUNCHED IN PLANTED 2009/2010 IN PENETRATION IN 2004 U.S.; BRAZIL 2007 ROUNDUP READY U.S. SOYBEAN FULLY PENETRATED INTERNATIONAL 12
  13. 13. COTTON Cotton Contributes to Doubling of Gross Profit via Breeding Investment and Conversion to Second-Generation Traits 2012 GROWTH RANGE MONSANTO GROSS PROFIT GROWTH TARGETS Gross profit targeted to double from 2007 through 2012 $9,000 STRATEGIC PLAYBOOK $8,000 Cotton Platform $7,000 1. Apply breeding technology $6,000 to diverse Delta and Pine GROSS PROFIT (IN MILLIONS) Land germplasm to restore $5,000 cotton seed share $4,000 2. Drive conversion to second- generation cotton $3,000 technology in the U.S. $2,000 3. Drive conversion to second- generation technology in $1,000 India $0 2004 2007 2012 MILESTONES 2010 2007 Gross margin Base Gross Profit: target: 52-54% $4,286M ONGOING EPS GROWTH: MID-TO-HIGH TEENS 13
  14. 14. COTTON Delta and Pine Land Share Loss in 2007 Reinforces Need for Reinvigorated Cotton Breeding Program DELTA AND PINE LAND U.S. COTTON SEED SHARE1 CROP: Cotton Restore 100% branded OBJECTIVE: cotton 90% (PLANTED ACRE BASIS) seed share 80% 2008 STATUS MARKET SHARE 70% • Delta and Pine Land 60% lost 9 share points in 50% 2007 40% • Delta and Pine Land’s 30% portfolio only 17% second-generation 20% traits compared with 10% industry average of 0% 41% in 20072 2012 OUTLOOK 2003 2004 2005 2006 2007 • Cotton seed share restored to 2006 levels 1. Source: dmrkynetec – cotton seed study – planted acre basis for new certified seed 2. Second-generation trait penetration reflects percent of commercial portfolio containing either Roundup Ready Flex, Bollgard II or both traits. 14
  15. 15. COTTON Delta and Pine Land’s Global Breeding Strategy Focused on Yield and Fiber Improvement Breeding Programs Testing Programs Greece U.S. (9) Winter Nurseries India Costa Rica (3) Brazil Australia South Africa GLOBAL COTTON BREEDING STRATEGY RESOURCES CAPABILITIES OUTLOOK • ‘Jumpstart’ of up to 3 years over • World’s largest private cotton • Focus on drought, fiber corn in 1990s with established breeding program quality, lint yield and disease infrastructure resistance • Strategically located in • Labs, IT and markers are ready • Novel targets: Diverse pivotal cotton areas to go; “plug-and-play” germplasm base can lead to • All lines feed into global opportunity new genetic pairings that testing and introgression • Largest marker collection in the greatly benefit farmers program world 15
  16. 16. COTTON U.S. Cotton Trait Acres Shift with Total Planted Cotton Acres; Opportunity to Upgrade to Second-Generation U.S. COTTON TRAIT ACRES (PERCENT OF TOTAL PLANTED ACRES) CROP: Cotton 25 100% Second- ABSOLUTE2 TRAIT ACRES OBJECTIVE: generation 20 technology 75% 2008 STATUS M ACRES 15 • Nearly 80% of the U.S. 50% planted cotton acres contained at least one 10 Monsanto trait in 2007 25% • Delta and Pine Land’s 5 portfolio was only 17% second-generation1 traits 0 compared with industry 0% average of 41% 2003 2004 2005 2006 2007 2012 OUTLOOK ROUNDUP READY BOLLGARD • Delta and Pine Land’s portfolio fully converted ROUNDUP READY FLEX BOLLGARD II to second-generation traits in all U.S. 1. Second-generation trait penetration reflects percent of commercial portfolio containing either Roundup Ready Flex, Bollgard II or both traits. segments 2. Absolute trait acres represents the total number of acres with at least one trait; two traits on one acre one absolute acre 16
  17. 17. COTTON Planned Upgrade to Second-Generation Cotton Technology in U.S. Focused on Southern Markets 46% ROUNDUP READY CROP: Cotton FLEX Second- 15% BOLLGARD II / OBJECTIVE: generation ROUNDUP READY FLEX technology 48% BOLLGARD II / 2008 STATUS ROUNDUP READY FLEX • Southern Delta region lags at 15% average penetration for second- generation traits 2012 OUTLOOK FOCUS ON SHIFTING SOUTHERN • Aggressive breeding DELTA TRAITED ACRES FROM 15% strategy to fully convert SECOND-GENERATION TO 100% BY to Bollgard II by start of 2012 2010 growing season; fully converted to U.S. COTTON SEED BRAND SHARE - 20071 Roundup Ready Flex TOTAL by 2012 46% 17% 45% 86% DELTA AND PINE LAND 17 1. Source: dmrkynetec – cotton seed study – planted acre basis for new certified seed
  18. 18. COTTON Bollgard Cotton Penetration in India Nearly Doubles in 2007; Creates Platform for Second-Generation Traits CROP: Cotton BOLLGARD & BOLLGARD II COTTON IN INDIA Second- M ACRES OBJECTIVE: generation technology 2008 STATUS 25 • Hybrid market now 15-20M 20 estimated to be 15-20 BOLLGARD II BOLLGARD million acres in India 2012 OUTLOOK 15 M ACRES • Expect market in India to be fully converted to 10 Bollgard II by 2012 5 2007 RETAIL PRICE/ACRE 0 SEED & TRAIT 2004 2005 2007 2006 2012 BOLLGARD BOLLGARD II OPPORTUNITY $ 18 $22 18
  19. 19. COTTON Launch of Roundup Ready Flex in India Would Further Improve Grower Profitability ROUNDUP READY FLEX OPPORTUNITY IN INDIA CROP: Cotton ROUNDUP READY 25 BOLLGARD FLEX/BOLLGARD II Launch Roundup OBJECTIVE: 20 BOLLGARD II Ready Flex 15-20M in India M ACRES 2008 STATUS 15 • Roundup Ready Flex 10 currently launched in the U.S. and Australia 5 • Approval pending in India; will only be offered as stack with 0 Bollgard II 2007 AT LAUNCH 2012 OUTLOOK OPPORTUNITY • Roundup Ready Flex ROUNDUP READY FLEX TECHNOLOGY has fit on all 15-20M ACRE hybrid cotton acres in 15-20M acres OPPORTUNITY India; allows India to leapfrog to second- • Reduces labor costs associated with hand weeding EXPECTED generation technology • Reduces fuel associated with mechanical harrowing BENEFITS • Replacement cost for herbicides used by some growers: ~$10/acre 19
  20. 20. COTTON Second-Generation Trait Conversion Accelerates Globally to Expand Gross Profit Contribution of Cotton GLOBAL COTTON SEED AND TRAITS GROSS PROFIT INDEX=2007 2012F 2007 1.8X OVER 2007 INDEX • In five years, Delta and Pine Land fully contributing with U.S. market share and second-generation trait growth • India becomes a larger player with conversion to second INTERNATIONAL generation traits • Australia and Brazil are small acre, but important markets 20
  21. 21. OVERVIEW Given Growth Opportunities, Monsanto Has Potential to More Than Double Gross Profit Over the Next Five Years 2012 GROWTH RANGE MONSANTO GROSS PROFIT GROWTH TARGET Gross profit targeted to double from 2007 through 2012 $9,000 STRATEGIC PLAYBOOK $8,000 All growth is organic, from $7,000 base business and pipeline GROSS PROFIT (IN MILLIONS) $6,000 U.S. Corn International Corn $5,000 Soybeans Cotton $4,000 Seminis $3,000 R&D Pipeline Acquisitions to be pursued, $2,000 but are not included in this $1,000 growth projection $0 Earnings continue to translate into operating cash, and value 2004 2007 2012 MILESTONES created for shareowners 2010 2007 through combination of Gross margin Base Gross Profit: acquisitions, share target: 52-54% $4,286M repurchases and dividends ONGOING EPS GROWTH: MID-TO-HIGH TEENS 21

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