monsanto 07-27-05

1

INVESTOR MEETINGSSummer 2005

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Forward-Looking Statements

Certain statements contained in this presentation, such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, currency impact, business and financial plans, the outcome of contingencies and other non-historical facts are "forward-looking statements." 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: the company's exposure to various contingencies, including those related to Solutia Inc., litigation, intellectual property, regulatory compliance (including seed quality), environmental contamination and antitrust; successful completion and operation of recent and proposed acquisitions; 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 estimates and projections, for example, those with respect to product returns and grower use of our products and related distribution inventory levels; the effect of weather conditions and commodity markets on the agriculture business; the success of the company’s research and development activities and the speed with which regulatory authorizations and product launches may be achieved; domestic and foreign social, legal and political developments, especially those relating to agricultural products developed through biotechnology; the company’s 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 protection for its intellectual property; the company's ability to fund its short-term financing needs; and other risks and factors detailed in the company's filings with the U.S. Securities and Exchange Commission. 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 revise or update any forward-looking statements or any of the factors that may affect actual results, whether as a result of new information, future events or otherwise.

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.

Fiscal Year

In this presentation, unless otherwise specified, references to Monsanto’s fiscal years refer to the 12-month period ending August 31.

Trademarks

Roundup, Roundup Ready, Roundup RReady2Yield, Bollgard, Bollgard II, YieldGard, Monsanto Imagine, Vine Design, Asgrow, DEKALB, Monsanto Choice Genetics, Posilac, Processor Preferred, Vistive and Seminis, Seminis Vegetable Seeds, Royal Sluis, Petoseed, and Bruinsma are trademarks owned by Monsanto Company and its wholly-owned subsidiaries and are italicized the first time they appear in this presentation.

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OVERVIEW

Monsanto Has Established Strategic Platforms inHigh-Value Crops

SEED & TRAIT CROP PLATFORMS

TECHNOLOGY PLATFORMS

CROP PLATFORMSCORN

COTTONOILSEEDS

VEGETABLES

GERMPLASMGENOMICSBREEDINGBIOTECHNOLOGY

Licensed

CORN

COTTON

OIL

SEED

S

VEGETA

BLES

Branded

ASIBranded

LicensedBranded

Biotechnology

Breeding

Genomics

Germplasm

Lice

nsed

ASI

Bran

ded

5


Monsanto’s Germplasm Resources Provide an Unmatched Base That Allows Us to Develop More Products, Better

GERMPLASMGermplasm is the “library” of genetic material contained in all the plants of a species. From the germplasm, plants inherit their basic characteristics that make them what they are, and breeding is based on using germplasm to find the best combinations that can make plants do more

Germplasm is the starting point for farming

None of the tools – markers, analytics, biotech – matter if there isn’t good base germplasm

Monsanto is doing more with its germplasm – across corn, soybeans, cotton and vegetables – than any other company in the industry today

MONSANTO GERMPLASM RESOURCES

•Germplasm from 6 continents

•More than 200 breeders on staff at Monsanto and Seminis

•More than 100 breeding research centers world wide

•Tens of millions of genes screened each year in germplasm combinations

•More than 2,000 genetic markers actively being used by breeders

6

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

ASI BRAZIL ARGENTINA

80M 30M 6M

3% 35% 49%

LICENSEDBRANDU.S.

32%14%

Corn Germplasm

Monsanto has the largest private international collection of corn germplasm, spanning 6 continents, 3 temperature zones, and 36 acquired breeding programs

No other company can make as many unique crosses from as many unique germplasm libraries as Monsanto

DISCOVERY PHASE IProof of Concept

PHASE IIEarly Development

PHASE IIIAdv. Development

PHASE IVPre-Launch

LAUNCH

2004 U.S. CORN YIELD GAINS

150

160

170

180

190

200

210

220

95 100 105 110 115

Monsanto Branded Competitors

BU

SH

ELS

PE

R A

CR

E

RELATIVE MATURITY (DAYS)

MARKET RESULTS

Industry’s Most Diverse Genetic Pool in Corn Creates New Opportunities for Monsanto

INTERNATIONAL GERMPLASM NETWORK

CREATING VALUE

• Value measured in market share gains; U.S. branded seed share projected for 4th year of 1+ point gain

• Elite, high-yielding germplasm refreshes product portfolio at high end of pricing

• Highest priced branded conventional hybrid averages $100/unit or $36/acre

7

0%

10%

20%

30%

40%

50%

60%

2001 2002 2003 2004 2005

MARKET RESULTS

Monsanto’s Germplasm Reach Has Grown Significantly Through Branded and Licensed Seeds

U.S. CORN MARKET SHARE – BRANDS AND LICENSEES

43% 44% 46%

5+ Branded Share Point Growth in

4 Years

51%49%DEKALB AND ASGROW BRANDSAMERICAN SEEDS BRANDS

HOLDENS/CORN STATES LICENSEES

8


Our Genomics Capabilities Allow Us to Unlock Germplasm, Mining Our Resources for the Best Opportunities

GENOMICSGenomics is one of the tools that “mine” the germplasm to find the best combinations of traits that can be bred into plants for better products. Genomics allows us to map the genes of the plant to understand their structure and the role they play in the plant’s function

Genomics is used to identify traits and markers that will move down different research pathways using breeding and biotechnology

Genomics makes the germplasm useful. There are more combinations of genes in corn than there are grains of sand in the world. Finding the fastest way to the best gene combinations is the key:

There are approximately 60,000 genes in corn

Only about 2 percent – or 1,200 -- appear to have been actively selected by man in the cultivation of corn

The probability of breeding the best combination of genes for a trait even within a set of just 20 genes is 1 in a trillion

By breeding using markers developed with genomics knowledge, those 1 in a trillion odds rapidly improve to as good as 1 in 5

9


Breeding is the Research Engine that Brings Commercial Value to Germplasm

BREEDINGBreeding is the process of cross-pollinating plants with desirable qualities to develop improved plants in successive generations; Molecular breeding is an enhanced tool for breeding that involves the use of DNA markers for genes in combination with physical measurement of traits to accelerate selection in plant breeding programs.

The scarce resource in developing improved seeds and seed traits is field testing because it is impossible for us to make and test all of the trillions of posible gene combinations. A successful breeding program assembles the combinations of germplasm that have the best chance of commercial success and puts them into the field for testing.

“MINING” FOR FIELD SUCCESS

GENOMICS BREEDING FIELDTRIALSGERMPLASM

“Mining” Activities

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Breeding Capability Provides a Platform that Allows Monsanto to Expand to Adjacent Business Spaces

CORN

TIM

E

COTTONSOYBEANS VEGETABLES

IDENTIFY MARKERS

APPLICATION EXPLORATION

CROSS-PLATFORM SHARING

PRODUCT LEAD GENERATION

IDENTIFY MARKERS




IDENTIFY MARKERS




IDENTIFY MARKERS



APPLICATIONS AND OPPORTUNITIES OVER TIME

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Molecular Breeding is Used To Create New Source of Seed for U.S. Cotton Farmers

Cotton States

The capabilities and knowledge we’ve refined in bringing new corn germplasm to the market applies in cotton as well

Germplasm licensed from third parties and developed through molecular breeding by Monsanto

Seed production under way for commercialization in 2006

Cotton States launching exclusively on a second-generation trait platform




PHASE IVPre-Launch

LAUNCH

MARKET RESULTS

KEY MARKET AREAS

TARGET MARKET

PERCENT PENETRATED

U.S.

7M-8M

0%

2004 COTTON STATES FIELD TRIALSLB

S L

INT

/AC

RE

1,200

1,300

1,400

1,500

1,600

COTTON STATES VARIETIES

COMPETITIVE VARIETIES

CREATING VALUE

• Rapid and broad introduction of traits and future innovations

• Licensing fee reflects value of top quality germplasm, separate from value of trait

• Cotton seed currently sells for average of $20 per acre

12

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED

U.S. BRAZIL ARGENTINA

5M TBD TBD

2% 0% 0%

Vistive Is First of Family of Improved Oils for Food Uses

VistiveLow Linolenic Soy

Vistive was developed by screening Monsanto’s germplasm and using advanced tools in breeding, effectively launching in 36 months from concept

Oil to be in on-the-shelf consumer products in late 2005




PHASE IVPre-Launch

LAUNCH

• Contract grown, value shared. Monsanto sells to growers, processors pay grower premium and royalty to Monsanto after harvest and crushing

• To be stacked with Mid-Oleic before full market penetration is achieved

• 1 acre = approximately 500 lbs. of oil

OIL PROFILES ALONG THE THREE-STEP CHANGE IMPROVEMENT

STANDARD SOYBEAN

LOW LIN

MID OLEIC + LOW LIN

ZERO SAT + MID OLEIC +

LOW LIN

LINOLENIC18:3

LINOLEIC18:2

OLEIC18:1

SATS18:0 / 16:0

CREATING VALUE

MARKET RESULTS

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Seminis Has Largest, Most Diverse Germplasm Pool in Vegetable Industry

Vegetable Breeding

Germplasm investment nearly double that of closest competitor

Vegetable seed germplasm is proprietary, scarce

75% of R&D devoted to breeding

Between 20%-25% of commercial products come from new hybrids introduced in prior two years




PHASE IVPre-Launch

LAUNCH

KEY MARKET POSITION

MARKET POSITION

NAFTALATIN

AMERICAEUROPE-AFRICA

1 1 1

ASIA PACIFIC

1

• Seminis branded seed recognized globally: Royal Sluis, Petoseed, Bruinsma, and Asgrow Vegetable

• Breeding valued for quality, taste, health benefits, disease control

• New seeds have greatest pricing opportunity

0%

5%

10%

15%

20%

25%

2002 2003 2004 2005F

VEGETABLE FRESHNESS INDEX

MARKET RESULTS

CREATING VALUE

14

Molecular Breeding Can Be Applied to Seminis’ Sweet Corn Breeding Programs

Knowledge Transfer to Sweet Corn




PHASE IVPre-Launch

LAUNCH

• Breeding knowledge transfer increases potential new product offerings

• Molecular breeding speeds creation of new hybrids

• Accelerated genetic gains have potential to translate to market share gains, higher market value


Immediate access to broad corn germplasm base

Within 4 weeks of closing the Seminis acquisition, Monsanto had identified 1,000 corn markers to help with Seminis sweet corn breeding

CREATING VALUE

WORLDWIDE

4

KEY MARKET POSITION

MARKET POSITION

15


Biotechnology Complements Breeding to Bring Farmers the Best Options

BIOTECHNOLOGYBiotechnology is the application of scientific knowledge to transfer beneficial genetic traits to enhance plants’ growth or to provide nutritional or other benefits to farmers, food and feed processors, or consumers

The use of biotechnology is an additive tool where there is a special value to be brought that can justify the additional R&D investment Second Generation

• Bollgard II cotton 2003

• Roundup Ready Flex cotton 2006

• Second-generationYieldGard Corn Borer corn PHASE III

• Roundup RReady2Yieldsoybeans PHASE III

Stacked

• YieldGard Plus corn 2004

• YieldGard Plus with Roundup Ready Corn 2 2005

Breakthrough Platforms

• Drought-tolerant corn PHASE I

• Omega-3 soybeans PHASE IIGrowth Opportunities

• Roundup Ready Corn 2 2001

16

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED




PHASE IVPre-Launch

LAUNCH

Roundup ReadyFlex Cotton

Anticipated largest trait launch of 2-3 million acres, pending final approvals

80-90% of Roundup Ready Flex to be stacked with Bollgard II

8 cotton seed companies currently breeding trait into varieties

Roundup Ready Flex Launch To Be Largest in 10-Year History of Biotech Traits

U.S. AUSTRALIA

10-15M 0.5-0.8M

0% 0%

• Value reflects greater convenience and enhanced weed control; lifts the value of the Roundup Readytrait

• Roundup ReadyFlex Cotton will be available predominately stacked with Bollgard II, which also should boost Bollgard IIadoption

MARKET RESULTS

CREATING VALUE

17

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED


70M 50M 30M

0% 0% 0%

Roundup RReady2YieldSoybeans

Identified lead event during agronomic and tolerance trials during the 2004 U.S. field season.

Second-generation testing indicates improved tolerance under extended spray conditions

2005 field trials planted in the U.S. and preparation of regulatory submission under way

CREATING VALUE




PHASE IVPre-Launch

LAUNCH

MARKET RESULTS

Testing of Second-Generation Roundup RReady2Yield Soybeans Indicates Extended Control

• Expanded window of application provides greater grower flexibility

• Yield improvement of 5+ bushels per acre in 2004 field trials

50

55

60

65

FIELD TRIAL YIELD

BU

/AC

RE

ROUNDUP READYSOYBEANSROUNDUP RREADY2YIELDSOYBEANS

SPRAYTIME 1

SPRAYTIME 2

SPRAYTIME 1&2

18

0

5

10

15

20

25

30

35

1998 1999 2000 2001 2002 2003 2004 2005F 2006F

MIL

LIO

NS

OF

AC

RE

S

Roundup ReadyCorn

Roundup Ready Corn Acreage Expected to Grow 35-40 Percent in 2005

MARKET RESULTS

CREATING VALUE




PHASE IVPre-Launch

LAUNCH

Current forecast of 23-24M acres of Roundup Ready corn in 2005 U.S. season

30M acres targeted in U.S. for 2006

With European import approval for single trait, U.S. market potential is now 50M acres

ARGENTINA

5M

<1%

KEY MARKET AREAS

TARGET MARKET

PERCENT PENETRATED

U.S.

50M

48%

U.S. ROUNDUP READY CORN ACREAGE GROWTH

• 2005 U.S. trait fee of $8-$10 per acre in Monsanto branded seed for single trait

• Grower profits average of $12 per acre on yield gains alone; additional cost savings on labor, fuel and equipment

• Provides grower greater flexibility in weed control

Inflection Points: There

are new trajectories

for growth in Roundup

Ready Corn

19

Stacked Trait Growth Is Driving Corn AccelerationA

CR

ES

IN

MIL

L IO

NS

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005

Roundup Ready/YieldGard Plus

Roundup Ready/YieldGard Corn Rootworm

Roundup Ready/YieldGard Corn Borer

Roundup Ready

U.S. CORN TRAIT ACRES WITH ROUNDUP READY

MARKET RESULTS

20

Triple-Stacked Corn Traits Fill a “Sweet Spot” in U.S. Corn Market Needs

MARKET RESULTS

CORE ACRESVALUE REFLECTS BROAD

TECHNOLOGY FIT

INSURANCE ACRESINSURANCE VALUE WITH PRICE

ELASTICITY

ROUNDUP READY

YIELDGARD CORN BORER

YIELDGARD ROOTWORM

INSURANCE ACRESINSURANCE VALUE WITH PRICE

ELASTICITY

21

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED


TBD TBD TBD

0% 0% 0%

Drought Stress Tolerance To Be Family of High-Value Traits in Multiple Crops

Drought-TolerantCorn

Yield protection on all acres against water deficits

Yield enhancement through improved water use on drought-prone acres and cost savings on irrigated acres

Two gene leads obtained positive results with more than one transformed event




PHASE IVPre-Launch

LAUNCH

• Pricing will reflect yield gains in all three markets; value of higher yields shared with farmer

• Stacking with weed and insect control enhances the margin opportunity

• Irrigation currently costs $50 to $100 per acre


0

5

10

15

20

25

30

YIE

LD I

NC

RE

AS

E

(BU

/AC

)

EVENT 1 EVENT 2 EVENT 30

2

4

6

8

10

12

14

16

18

EVENT 1 EVENT 2 EVENT 3

3 EVENTS: GENE 1 3 EVENTS: GENE 2

GERMPLASM 1 GERMPLASM 2

CREATING VALUE

YIELD INCREASE IN TWO GENE TRIALS

22

KEY MARKET ACRES

AVAILABLE MARKET

PERCENT PENETRATED


TBD TBD TBD

0% 0% 0%

Omega-3 Oilseeds


Omega-3 Biofortification Could Be a Food Industry Breakthrough

American Heart Association, American Diabetic Association, and 1,600+ research studies support health benefits

Vegetable oils enriched with bio-available Omega-3, which promotes heart health

Enhanced stability; Best applications in refrigerated or frozen foods or as animal feed for Omega-3 enriched poultry or pork




PHASE IVPre-Launch

LAUNCH

DIETARY OMEGA-3 IN BIOTECH OILSEED

100%FATTY ACID (WT%)

BIOTECH

20% 40% 60% 80%SATURATES

MONO-UNSATURATES

OTHER POLY-UNSATURATES

NEW BIO-AVAILABLE

OMEGA-3 CONTROL

CREATING VALUE

• Contract grown, value shared. Monsanto sells to growers, processors pay grower premium and royalty to Monsanto after harvest and crushing

• 1 acre = approximately 500 lbs. of oil

• Small acres, but high value per acre

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Seeds and Traits Business Built on Breeding and Biotechnology Platforms


VISTIVE LOW-LIN SOYBEANS LAUNCHED2005 Planting

GENOMICS CONVENTIONAL BREEDING

MOLECULAR BREEDING

CROP ANALYTICS BIOTECHNOLOGY

Breeding and Biotechnology provide powerful platforms that can be pursued separately or combined where there is untapped opportunity

EXAMPLE: FOOD-TRAIT PRODUCT PROGRESSION

BREEDING

PHASE IIIAdvanced Development

BREEDINGMID OLEIC + VISTIVE LOW-LIN SOYBEANS

OMEGA-3 SOYBEANS BIOTECHPHASE IIEarly Development


BREEDING + BIOTECHZERO SAT +MID OLEIC + VISTIVE LOW-LIN SOYBEANS

PIPELINE PROJECT PROGRESSION TECHNOLOGY PLATFORMS APPLIED

EACH INDIVIDUAL PRODUCT USES THE APPROPRIATE PLATFORM OR PLATFORMS, BUT THE PRODUCT FAMILY IS POSSIBLE ONLY WITH BOTH BREEDING AND BIOTECH

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The Combination of Capabilities Translates to Increasing R&D Velocity and New Commercial Opportunity

MARKET RESULTS

GENOMICS CONVENTIONAL BREEDING

MOLECULAR BREEDING

CROP ANALYTICS BIOTECHNOLOGY

PLATFORM COMMERCIAL AREA MARKET RESULTS TIME TO RESULTS

CORN DEKALBASGROW

5+ MARKET SHARE POINT GAIN 4 YEARS

COTTON COTTONSTATES

BUILT GERMPLASM BANK COMPARABLE TO INDUSTRY-BEST

GERMPLASM3+ YEARS

SOYBEANS VISTIVELOW-LIN SOYBEANS

LAUNCHED NEW PRODUCT FROM

CONCEPT36 MONTHS

VEGETABLES SWEETCORN

IDENTIFIED NEW BREEDING MARKERS 2 WEEKS

SPEED OF RESEARCHOPPORTUNITIES OPENED

25

MARKET RESULTS

3 4

1 2Pipeline projects denoted in white text and represent global value; Commercial products denoted in gold and are U.S.-only, unless otherwise indicated.1. “Acre Potential” represents the maximum acre penetration by the trait individually and as a stacked trait in the three-year span during its peak.2. “Per-Acre” premium represents the per-acre average value in the three-year span during the trait penetration peak.

PRICING VALUE MATRIX

ROUNDUP READYSOYBEANS

BOLLGARD II COTTON (INDIA)YIELDGARDROOTWORM

2ND GENERATION ROUNDUP READY SOYBEANS

DROUGHT TOLERANT CORN

DROUGHT TOLERANT SOYBEANS

DROUGHT TOLERANT COTTON

HIGHER-YIELDING SOYBEANS

HIGH-LYSINE CORN

IMPROVED-OIL SOYBEANS FOR PROCESSING

IMPROVED-PROTEIN SOYBEANS FOR FOOD

2ND GENERATION HIGH-LYSINE CORN

IMPROVED-ENERGY CORN III

VISTIVE SOYBEANS

IMPROVED-PROTEIN SOYBEANS FOR FEED

VISTIVE MID-OLEIC + LOW-LINOLENIC SOYBEANS

OMEGA-3 SOYBEANS

VISTIVE ZERO SATURATED FAT + MID-OLEIC + LOW-LINOLENIC SOYBEANS

Pipeline Is Valued Across Market Opportunities and Crops

LARGE-ACRE (11-100 MILLION+)1SMALL-ACRE (0-10 MILION)1 HIG

H P

ER

-AC

RE

($1

1-$1

00+)

2

PROCESSOR PREFERRED ELITE GERMPLASM

YIELDGARD CORN BORERLO

W P

ER

-AC

RE

($0

-$10

)2

ROUNDUP READY + FLEX COTTON

ROUNDUP READY CORN

HIGHER-YIELDING CORN

BOLLGARD II COTTON

ROUNDUP READY + FLEX COTTON (AUSTRALIA)

BOLLGARD II COTTON (AUSTRALIA)

26

BIOTECH ACRES PLANTED 2004

REMAINING AVAILABLE MARKET

SOYBEANS COTTON CORNKEY

MARKETSRoundup

ReadyRoundup

ReadyBollgard I

and IIRoundup

ReadyYieldGard

Corn Borer

YieldGardRoot-worm

United States 70M 10-15M 6-8M 50M 30M-40M 15-20M

Brazil 50M - - 20M 15M 5M

Argentina 30M - - 5M 4M 1M

India - - 10-15M - - -

Australia - 0.5M-0.8M

0.5M-0.8M - - -

MARKET RESULTS

Market Potential for Biotech Traits Highlights Continued Growth Opportunity

TOTAL AVAILABLE MARKET IN ACRES

71% 66% 35% 22% 57% 7%

9

27

OVERVIEW

Monsanto Has Established Strategic Platforms inHigh-Value Crops

MOLECULAR AND CONVENTIONAL BREEDING

BIOTECHNOLOGY

CORN SOYBEANS COTTON VEGETABLELARGE-ACRE CROPS SMALL-ACRE CROPS

Branded Licensed Branded Licensed Branded Licensed BrandedASI

DEKALBASGROW

HOLDEN’S/ CORN

STATESAMERICAN

SEEDS, INC.

SEMINISASGROWDEKALB

HOLDEN’S/ CORN

STATES

EMERGENT

COTTON STATES

R&D PLATFORMS

SEED & TRAIT CROP PLATFORMS

ASI

AMERICAN SEEDS, INC.

Economy & Finance

monsanto 07-27-05