2. Forward-Looking Statements
Certain statements contained in this presentation 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, including Delta and Pine Land Company; 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 presentation. The company disclaims any current
intention or obligation to update any forward-looking statements or any of the factors that may affect
actual results.
Trademarks
Trademarks owned by Monsanto Company and its wholly-owned subsidiaries are italicized in this presentation.
Extrax is a trademark of Renessen, LLC.
Š 2008 Monsanto Company
2
3. STRATEGIC OUTLOOK
Monsantoâs 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 GERMPLASM IMPROVEMENTS
37 bu/ac
Soybeans:
AGRONOMIC PRACTICE IMPROVEMENTS
260 632 lbs/ac
BREEDING IMPROVEMENTS
Cotton:
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
3
4. OVERVIEW
Breeding and Biotech Provide Parallel R&D Paths to
Commercial Products
BREEDING and BIOTECHNOLOGY form two R&D pathways
Separate, but parallel, the BREEDING and BIOTECHNOLOGY pathways are linked
by shared tools.
DISCOVERY PHASE I PHASE II
R&D PHASE: PHASE III PHASE IV LAUNCH
BREEDING
G
COMMERCIAL
IT PLATFORM
GERMPLASM
ANALYTICS
MARKERS
GENOMICS
SEED
ELITE
Germplasm SOLD TO
R FARMERS
BIOTECHNOLOGY
4
5. BREEDING
Germplasm Is Building Block for Better Seed; Germplasm
Library Is Building Block for Better Breeding
CORN SEED GERMPLASM LIBRARY GERMPLASM
ASSEMBLED GEOGRAPHIC POOLS
OVERVIEW:
Germplasm is like breeding in
thoroughbred race horses â
just as breeders select for the
fastest race horses, seed
breeders look to pair the best
pool of genes for the strongest
TEMPERATE yielding seed
SUB-TROPICAL APPLICATION:
Germplasm pools allow
breeders to target key
TROPICAL
physiological traits:
⢠Increased Yield
SUB-TROPICAL
⢠Disease Resistance
TEMPERATE
⢠Stress Tolerance
⢠Grain Quality / Added Value
Monsantoâs corn germplasm library is assembled from
36 breeding programs in 12 different countries
Annually, breeders exchange more than a million
different âpackagesâ of germplasm material
>50% of Monsantoâs corn hybrids result from intra-
company crosses
5
6. BREEDING
Markers Allow Breeders to Get Best Combinations of
Germplasm Faster With Greater Predictability
TRACKING CHARACTERISTICS FOR YIELD MARKERS
YIELD-RELATED AREAS ON CORN CHROMOSOMES
OVERVIEW:
A corn plant has 40,000 genes spanning 10
chromosomes. Characteristics â or traits â are
9 10
1 2 3 4 56 7 8 built from different pieces on different
chromosomes. Markers are DNA âflagsâ that
indicate where particular genes are located
APPLICATION:
Using markers to make better selections,
breeders can improve the probability of
success:
Probability of finding 1 trait that is
controlled by 20 genes
âRandomâ crosses: 1 per trillion
After application of
markers and
Regions associated with
breeding
yield coming from Parent 1
technology
Regions associated with
yield coming from Parent 2
1 in 5
6
7. BREEDING
Monsanto Investment in Molecular Breeding is Accelerating
the Rate of Gain Over Conventional Breeding
MOLECULAR MARKERS
âş >$100M invested in
molecular markers
platform
âş Staff of >150 scientists
using proprietary tools
are supporting the
further development and
use of marker
technology
Automated Marker Analysis
Soybean Seed Chipper
âş Capability to analyze
10s of millions of
samples
âş $75M investment in
proprietary software This capability fuels the creation of top-tier
tools germplasm and sets the genetic knowledge base to
âş 3 million marker-trait deliver next- generation biotech traits.
associations providing
detailed genome
understanding
8. BREEDING
Core Research Methods Have Applicability Across Crop
Platforms, Magnifying Investment and Productivity
SHARED TECHNOLOGY AND METHODS
CROP
IT MARKER-TRAIT
MARKER
MARKER
PLATRFORMS
SYSTEMS ASSOCIATIONS
DETECTION
DISCOVERY
Focused on methods Focused on state-of- Focused on creating Focused on the best
for discovering new the-art platforms to unified decision- application of
markers, moving to a detect markers that making systems to marker-trait
âSNPâ (single maximize efficiency better enable associations to
CORN nucleotide and minimize cost breeding efficiency select for most
polymorphism) commercially-
platform for all crops relevant traits
APPLICATION TODAY: APPLICATION TODAY: APPLICATION TODAY: APPLICATION TODAY:
Thousands of SNP Proprietary Proprietary Associations used
SOYBEANS markers already automated systems interconnected IT for complex traits â
identified and in use in place for corn, systems in place for like yield â in corn
for corn soybeans and cotton corn, soybeans and and soybeans, and
and soybeans cotton simpler traits in
OPPORTUNITY: vegetables
Leverage existing
OPPORTUNITY: OPPORTUNITY:
Development of SNP platforms for
COTTON Utilize existing OPPORTUNITY:
markers for 9 additional species systems to provide Marker-trait
different row crop and upgrading comparable associations will
and vegetable systems for all crops capabilities for allow for predictive
species vegetables breeding for key
traits in all relevant
crops
VEGETABLES
8
9. BREEDING & BIOTECHNOLOGY
MAB Application in Soybeans Led to Roundup Ready 2
Yield Soybeans
GOAL: Use DNA Markers To Improve the Efficiency of Plant Breeding Procedures
STRATEGY: Identify genes that control key agronomic traits;
use new breeding procedures to better select for these
genes; increase rate of genetic gain in breeding programs.
2007 RR2Y - 170 Total Testing Sites
⢠Roundup Ready 2 Yield soybeans offer 7% - 11% yield advantage, based on near-isoline
comparisons, based on four years of field comparisons
9
10. BREEDING + BIOTECHNOLOGY
Delivering Yield Favors Companies That Can Provide Both
Breeding and Biotechnology Improvements in Concert
FOCUS: YIELD
WHAT MATTERS TO FARMERS IS THE YIELD
AT HARVEST, WHICH IS A FUNCTION OF HOW
MUCH POTENTIAL A SEED HAS AND HOW
ITâS PROTECTED: GENETIC POTENTIAL (FUTURE)
CURRENT GENETIC POTENTIAL AND TRAITS
NET REALIZED YIELD
+ BREEDING ADVANCES WITH FUTURE
PROTECTION AND
PROTECTION
+
ENHANCEMENT
IMPROVED
OPPORTUNITIES
BIOTECH ADVANCES
ADVANCES
NITROGEN
BIOTECH
UTILIZATION
FUTURE GENETIC PLATFORM DROUGHT
TOLERANCE
SECOND-
GENERATION
INSECT CONTROL
GENETIC POTENTIAL (FUTURE)
ADVANCES
BREEDING
GENETIC POTENTIAL (CURRENT)
INSECT
NATURAL YIELD
NET REALIZED YIELD WITH
PRESSURE
SUPPRESSION
BELOW-GROUND CURRENT PROTECTION
CURRENT YIELD
WEED PRESSURE INSECT CONTROL
PROTECTION
NUTRIENT ABOVE GROUND
GENETIC POTENTIAL PRESERVED
INSECT CONTROL
DEFICIENCY THROUGH BIOTECH TRAITS AND
PRODUCTION ADVANCES
WATER WEED-CNTROL
DEFICIENCY TRAITS
NET REALIZED YIELD WITH
SEED NO PROTECTION
MANUFACTURING
10
11. BIOTECHNOLOGY
Early Pipeline Work Focuses On Identifying Best Genes
and Introducing Leads Into Plants for Development
AGROBACTERIUM
BIOTECH DISCOVERY
Agrobacterium tumefaciens
GENE SOURCES:
DNA
naturally inserts DNA
Hundreds of thousands of
genes are screened to find segments into plant cells â
candidates for biotech traits this is used to transfer AGROBACTERIUM GENE TRANSFER
⢠Genes come from plant TUMEFACIENS
identified genes PLASMID
sources, including bacteria,
fungi, microorganisms (like
bakerâs yeast) and native
GENE
genes in plants TRANSFORMED INSERTION
PLANT CELL NUCLEUS
⢠Genes used in insect- WITH GENE CHROMOSOME
protected crops to date are
from âbacillus thuringiensis,â
or âBt,â a class of naturally
PARTICLE ACCELERATION â GENE GUN
occurring soil bacteria with
thousands of different strains
DNA-COATED
that target specific insects Gene guns use âbiolistics,â PELLETS
DNA
using particles coated in DNA
GENE INSERTION:
that are introduced into plant
There are two key methods
cells
used to insert genes into PARTICLE
ACCELERATION
plants:
⢠Agrobacterium
⢠Particle acceleration (gene GENE
gun) INSERTION
TRANSFORMED
NUCLEUS
PLANT CELL
CHROMOSOME
WITH GENE
11
12. BIOTECHNOLOGY
Biotech Pipeline Follows Pharmaceutical-Like Development
PHASE II PHASE III PHASE IV
DISCOVERY PHASE I
Early Development Advanced Pre-launch
Proof Of Concept
Gene/Trait Development
Identification
AVERAGE
24 to 48 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 36 MONTHS
DURATION1
MONSANTO
DISCOVERY + REGULATORY DATA GENERATION
COLLABORATIVE
PARTNERS
KEY INFLECTION POINT:
AFTER PHASE II COMMERCIAL
SUCCESS GOES TO >50%
WITH LEADS ON COMMERCIAL
TRACK
GENES IN
TENS OF THOUSANDS THOUSANDS 10s <5 1
TESTING
1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the time estimated here.
12
13. BIOTECHNOLOGY
Stage-Gate Model Provides Systematic Evaluation and
Built-In Cost Prioritization
DISCOVERY PHASE III PHASE IV
PHASE I PHASE II Advanced
Gene/Trait Early Development Pre-launch
Proof Of Concept Development
Identification
AVERAGE
24 to 48 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 24 MONTHS 12 to 36 MONTHS
DURATION1
⢠High- ⢠Optimizing gene ⢠Commercial ⢠Extensive field ⢠Completion of
throughput in greenhouse transformations testing to regulatory
gene screening and fields to of genes into generate submissions
KEY establish proof crop plants regulatory data
⢠Model crop ⢠Commercial
ACTIVITY
of concept and for
⢠Scale up events
testing seed bulk up
agronomic
for large-scale testing
field testing
RELEVANT
REGULATORY
âBESTâ GENES
TRIGGER TO LEAD EVENTS
GENE LEADS REGULATORY
PACKAGES
IDENTIFIED
ADVANCE TO
SELECTED
IDENTIFIED REVIEWS
SUBMITTED
NEXT PHASE
COMPLETED
AVERAGE
5% 25% 50% 75% 90%
PROBABILITY
OF SUCCESS2
RELATIVE R&D
COST PER
PROJECT3 COST-INFLECTION POINT:
PER-PROJECT COSTS ONLY MOVE UP ONCE
COMMERCIAL TRANSFORMATIONS ARE MADE, AND
THE PROBABILITY OF SUCCESS ALSO INCREASES
1. Time estimates are based on our experience; they can overlap. Total development time for any particular product may be shorter or longer than the time estimated here.
2. This is the estimated average probability that the traits will ultimately become commercial products, based on our experience. These probabilities may change over time.
3. Relative cost reflects an estimate of cumulative costs for a composite project. Actual spending will vary for any individual project.
13
14. BIOTECHNOLOGY
Genes Selected for Evaluation Travel the Circuit from
Sequencing to Field Testing
LIFE OF A GENE LEAD IN PLANT BIOTECHNOLOGY
Step 2 Step 3
Gene cloning Transformation
& sequencing
Step 1
Gene sourcing
Step 4
& nomination
Seed increase
Step 6 Step 5
Data analysis Field testing
& decision
making
15. BIOTECHNOLOGY
Performance of Lead Genes Re-Affirmed From Early Testing
in Model Crops to Large Scale Field Trials
DISCOVERY: MODEL CROPS
PHASE II & III: LARGE SCALE FIELD TRIALS
Gene E Gene B
Gene D
Gene A
Gene C
PHASE I: TARGET CROP
Gene F
Gene A
Gene H
Gene I
Gene F
Gene G
Gene A
15
16. 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 in September â Submitted for
2008 regulatory review and
refuge reduction
⢠On track for 2009
release; 2010 full launch
SUPERIOR, NE - FIELD TRIALS â 2007 FARM PROGRESS SHOW â 2007
WITH GENE
CONTROL HYBRID
FARM PROGRESS SHOW â 2007 (94 BU/AC)
(76 BU/AC)
1. Part of the Monsanto-BASF Yield and Stress R&D Collaboration
16
