monsanto 2004 08a

1Investor PresentationInvestor Presentation

August 2004August 2004

2ForwardForward--Looking StatementsLooking Statements

Certain statements contained in this presentation, such as stateCertain statements contained in this presentation, such as statements concerning the company's anticipated financial ments concerning the company's anticipated financial results, current and future product performance, regulatory apprresults, current and future product performance, regulatory approvals, currency impact, business and financial plans and ovals, currency impact, business and financial plans and other nonother non--historical facts are "forwardhistorical facts are "forward--looking statements." These statements are based on current expeclooking statements." These statements are based on current expectations and tations and currently available information. However, since these statementscurrently available information. However, since these statements are based on factors that involve risks and are based on factors that involve risks and uncertainties, the companyuncertainties, the companys actual performance and results may differ materially from thoss actual performance and results may differ materially from those described or implied by e described or implied by such forwardsuch forward--looking statements. Factors that could cause or contribute to sulooking statements. Factors that could cause or contribute to such differences include, among others: the ch differences include, among others: the companycompanys exposure to various contingencies, including those related to s exposure to various contingencies, including those related to Solutia, Inc., litigation, intellectual property, Solutia, Inc., litigation, intellectual property, regulatory compliance (including seed quality), environmental coregulatory compliance (including seed quality), environmental contamination and antitrust; fluctuations in exchange rates ntamination and antitrust; fluctuations in exchange rates and other developments related to foreign currencies and economiand other developments related to foreign currencies and economies; increased generic and branded competition for the es; increased generic and branded competition for the company's Roundup herbicide; the accuracy of the companycompany's Roundup herbicide; the accuracy of the companys estimates and projections, for example, those with respect s estimates and projections, for example, those with respect to product returns and grower use of our products and related dito product returns and grower use of our products and related distribution inventory levels; the effect of weather stribution inventory levels; the effect of weather conditions and commodity markets on the agriculture business; thconditions and commodity markets on the agriculture business; the success of the companye success of the companys research and s research and development activities and the speed with which regulatory authodevelopment activities and the speed with which regulatory authorizations and product launches may be achieved; rizations and product launches may be achieved; domestic and foreign social, legal and political developments, edomestic and foreign social, legal and political developments, especially those relating to agricultural products specially those relating to agricultural products developed through biotechnology; the company's ability to contindeveloped through biotechnology; the company's ability to continue to manage its costs; the companyue to manage its costs; the companys ability to s ability to successfully market new and existing products in new and existinsuccessfully market new and existing products in new and existing domestic and international markets; the companyg domestic and international markets; the companys s ability to obtain payment for the products that it sells; the coability to obtain payment for the products that it sells; the company's ability to achieve and maintain protection for its mpany's ability to achieve and maintain protection for its intellectual property; the effects of the company's accounting pintellectual property; the effects of the company's accounting policies and changes in generally accepted accounting olicies and changes in generally accepted accounting principles; the company's ability to fund its shortprinciples; the company's ability to fund its short--term financing needs; general economic and business conditions; term financing needs; general economic and business conditions; political and economic conditions due to threat of future terrorpolitical and economic conditions due to threat of future terrorist activity and related military action; and other risks and ist activity and related military action; and other risks and factors detailed in the company's filings with the U.S. Securitifactors detailed in the company's filings with the U.S. Securities and Exchange Commission. Undue reliance should not es and Exchange Commission. Undue reliance should not be placed on these forwardbe placed on these forward--looking statements, which are current only as of the date of thilooking statements, which are current only as of the date of this release. The company s release. The company disclaims any current intention to revise or update any forwarddisclaims any current intention to revise or update any forward--looking statements or any of the factors that may affect looking statements or any of the factors that may affect actual results, whether as a result of new information, future eactual results, whether as a result of new information, future events or otherwise.vents or otherwise.

ForwardForward--Looking StatementsLooking Statements

3NonNon--GAAP Financial InformationGAAP Financial Information

This presentation uses the nonThis presentation uses the non--GAAP financial measures of GAAP financial measures of free cash flowfree cash flow and earnings per share (and earnings per share (EPSEPS) ) excluding the effect of certain items. We define excluding the effect of certain items. We define free cash flowfree cash flow as the total of cash flows from operating as the total of cash flows from operating activities and cash flows from investing activities. A nonactivities and cash flows from investing activities. A non--GAAP EPS financial measure (which we sometimes GAAP EPS financial measure (which we sometimes refer to as EPS from ongoing business) may exclude the impact ofrefer to as EPS from ongoing business) may exclude the impact of restructuring charges, charges associated restructuring charges, charges associated with the settlement of litigation, gains and losses on the sale with the settlement of litigation, gains and losses on the sale of assets, and certain other items. The specific of assets, and certain other items. The specific items that are excluded from, and result in, our nonitems that are excluded from, and result in, our non--GAAP EPS financial measure are clearly identified as such GAAP EPS financial measure are clearly identified as such in this presentation. The presentation of free cash flow and EPin this presentation. The presentation of free cash flow and EPS excluding the effect of certain items is S excluding the effect of certain items is intended to supplement investorsintended to supplement investors understanding of our operating performance. These nonunderstanding of our operating performance. These non--GAAP financial GAAP financial measures may not be comparable to similar measures used by othermeasures may not be comparable to similar measures used by other companies. Furthermore, these noncompanies. Furthermore, these non--GAAP financial measures are not intended to replace net income (GAAP financial measures are not intended to replace net income (loss), cash flows, financial position, or loss), cash flows, financial position, or comprehensive income (loss), as determined in accordance with accomprehensive income (loss), as determined in accordance with accounting principles generally accepted in counting principles generally accepted in the United States. The nonthe United States. The non--GAAP financial measures used in this presentation are reconciledGAAP financial measures used in this presentation are reconciled to the most to the most directly comparable financial measure calculated and presented idirectly comparable financial measure calculated and presented in accordance with GAAP and can be found at n accordance with GAAP and can be found at the end of this presentation.the end of this presentation.

NonNon--GAAP Financial InformationGAAP Financial Information

Fiscal YearFiscal YearIn this presentation, unless otherwise specified rIn this presentation, unless otherwise specified references to years, or to fiscal years, 2001 through 2006 eferences to years, or to fiscal years, 2001 through 2006 are on a fiscal year basis and refer to the 12are on a fiscal year basis and refer to the 12--month period ending August 31.month period ending August 31.

TrademarksTrademarksRoundup, Roundup Ready, Bollgard, Bollgard II,Roundup, Roundup Ready, Bollgard, Bollgard II, YieldGardYieldGard, Harness,, Harness, PosilacPosilac and the Monsanto, Imagine and and the Monsanto, Imagine and vine logo are trademarks owned by Monsanto Company and its whollvine logo are trademarks owned by Monsanto Company and its wholly owned subsidiaries. All other y owned subsidiaries. All other trademarks are the property of their respective owners. trademarks are the property of their respective owners. 2004. Monsanto Company. All Rights Reserved.2004. Monsanto Company. All Rights Reserved.

4Monsantos Business Focuses on Agriculture GloballyMonsantos Business Focuses on Agriculture Globally

Sales by Business SegmentSales by Business Segment Sales by Geographic RegionSales by Geographic Region

Biotechnology Trait Biotechnology Trait Acreage by CropAcreage by Crop

Seeds and GenomicsSeeds and Genomics

Agricultural ProductivityAgricultural Productivity

Soybean traitsSoybean traits

Cotton traitsCotton traits

Corn traitsCorn traits

Canola traitsCanola traits

North AmericaNorth America

EuropeEurope--AfricaAfrica

Latin AmericaLatin America

AsiaAsia--PacificPacific

Source: 2003 Earnings DataSource: 2003 Earnings Data

150M Acres Worldwide150M Acres Worldwide

2003 Sales $4.9B2003 Sales $4.9B

5Agricultural Productivity Continues To Generate Agricultural Productivity Continues To Generate Significant CashSignificant Cash

Key Market PositionsKey Market Positions

No. 1 Selling No. 1 Selling HerbicideHerbicide

Selective Herbicides Hold Selective Herbicides Hold the No. 2 U.S. Positionthe No. 2 U.S. Position

LargestLargest--Selling DairySelling Dairy--Related Related Animal Health ProductAnimal Health Product

6Roundup Remains Leading Product in Global Crop Roundup Remains Leading Product in Global Crop Protection MarketProtection Market

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Source: Monsanto and Phillips McDougall, 2003Source: Monsanto and Phillips McDougall, 2003

Roundup*Roundup*

AcetochlorAcetochlor

2,42,4--DDParaquatParaquat

MetolachlorMetolachlor AtrazineAtrazine

GlufosinateGlufosinate

PendimethalinPendimethalin NicosulfuronNicosulfuron

SulfosateSulfosate

2003 sales 2003 sales $ millions$ millions

FenoxapropFenoxaprop

* Branded and third party supply revenue* Branded and third party supply revenue

7Having Managed PostHaving Managed Post--Patent Decline, Roundup Patent Decline, Roundup Strategy Shifts Focus to Improving Return on CapitalStrategy Shifts Focus to Improving Return on Capital

Working Capital Working Capital InvestmentInvestment

StaffingStaffing

Distribution Distribution Push Push MarketingMarketing

OnOn--Farm Pull Farm Pull MarketingMarketing

Number of Number of SKUsSKUs

U.S.U.S.

IncreaseIncrease DecreaseDecrease

U.S. branded net average selling price U.S. branded net average selling price projected in range of $13.50 to $14.50 projected in range of $13.50 to $14.50 per gallon in 2004, sustained in 2005per gallon in 2004, sustained in 2005

Brand strength supports 60% U.S. Brand strength supports 60% U.S. market share in 2005market share in 2005

Restructuring actions in place to move Restructuring actions in place to move Roundup SG&A to low teens as percent Roundup SG&A to low teens as percent of sales in 2006of sales in 2006

Reducing number of branded Roundup Reducing number of branded Roundup SKUs globally by 45% (20% in 2001SKUs globally by 45% (20% in 2001--2003 2003 and an additional 25% in 2004and an additional 25% in 2004--2005)2005)

8Biotechnology Continues To Grow GloballyBiotechnology Continues To Grow Globally

Global Monsanto Planted Biotech AcresGlobal Monsanto Planted Biotech AcresAcres in millionsAcres in millions

Source: Monsanto estimatesSource: Monsanto estimates

0

20

40

60

80

100

120

140

160

180

1996

1997

1998

1999

2000

2001

2002

2003

2004

Pre

limina

ry

Canola

Cotton

Corn

Soybeans

9Market Potential for Biotech Traits Highlights Market Potential for Biotech Traits Highlights Continued Growth OpportunityContinued Growth Opportunity

0.5M0.5M--0.8M0.8M0.5M0.5M--0.8M0.8M--------AustraliaAustralia

1010--15M15M----------IndiaIndia

----1M1M4M4M5M5M30M30MArgentinaArgentina

----5M5M15M15M20M20M50M50MBrazilBrazil

66--8M8M1010--15M15M1515--20M20M30M30M--40M40M20M20M--50M50M70M70MUnited StatesUnited States

Bollgard I Bollgard I and II and II

CottonCotton

Roundup Roundup Ready Ready CottonCotton

YieldGard YieldGard Root Root WormWorm

YieldGard YieldGard Corn Corn BorerBorer

Roundup Roundup Ready Ready CornCorn

Roundup Roundup Ready Ready

SoybeansSoybeans

Key MarketsKey Markets

Total Available Market in AcresTotal Available Market in Acres

Biotech Biotech Acres Acres Planted 2004 Planted 2004 PreliminaryPreliminaryRemaining Remaining Available Available MarketMarket

64%64%64% 21%21%21% 61%61%61% 8%8%8% 66%66%66% 26%26%26%

10

Seed and Trait Momentum Fuels MidSeed and Trait Momentum Fuels Mid--Term Earnings Term Earnings GrowthGrowth

Seeds and traits projected to grow significantlySeeds and traits projected to grow significantly Breeding advancements continue to improve seed Breeding advancements continue to improve seed

performanceperformance SecondSecond--generation and stacked traits offer unmatched generation and stacked traits offer unmatched

benefits to growers benefits to growers

Roundup shifts focus toward improving return Roundup shifts focus toward improving return on capitalon capital Roundup remains major source of free cash flowRoundup remains major source of free cash flow

R&D advancements accelerate longer term R&D advancements accelerate longer term growthgrowth

10% EPS CAGR in 2005 and 2006 from Ongoing Business10% EPS CAGR in 2005 and 2006 from Ongoing Businesswith Strong Free Cash Flowwith Strong Free Cash Flow

11

Round 1:Round 1: Seed and SingleSeed and Single--Trait Positions Firmly Trait Positions Firmly Established and GrowingEstablished and Growing

Seed Breeding AdvancementsSeed Breeding Advancements

FirstFirst--Generation TraitsGeneration Traits

Geographic ExpansionGeographic Expansion

Value CaptureValue Capture

Round 1

12

Breeding Advancements Are Critical to Corn GrowthBreeding Advancements Are Critical to Corn Growth

Top of the marketAverage of the marketBelow average of the market

Disease ResistanceDisease Resistance

StandabilityStandability

YieldYield

FranceFrance

YieldYield

BrazilBrazil StandabilityStandabilityDisease ResistanceDisease Resistance

YieldYieldU.S. Central & U.S. Central & SouthSouth>105 Day RM*>105 Day RM*





YieldYieldU.S. NorthU.S. North

13

0

20

40

60

80

100

Soyb

ean t

raits

Cotto

n trai

tsCo

rn tr

aits

Libert

y Link

corn

Clea

rfield

IMI c

orn

Herc

ulex c

orn

Source: MonsantoSource: Monsanto

Percentage of 2004 U.S. total planted acresPercentage of 2004 U.S. total planted acres(Preliminary)(Preliminary)

Monsantos Biotech Portfolio Has Established Industry Monsantos Biotech Portfolio Has Established Industry Standard for FirstStandard for First--Generation TraitsGeneration Traits

Competitive productsCompetitive products

Monsanto productsMonsanto products

Round 1: FirstRound 1: First--Generation TraitsGeneration Traits

14Source: Monsanto and Source: Monsanto and Doane Doane Market ResearchMarket Research

Roundup Ready Soybeans Deliver Superior Weed Roundup Ready Soybeans Deliver Superior Weed Control at Competitive System CostControl at Competitive System Cost

Unmatched weed control in Roundup Ready SoybeansUnmatched weed control in Roundup Ready Soybeans

Round 1: FirstRound 1: First--Generation TraitsGeneration Traits

$48$48

$40$40

19981998 20032003

$ per acre$ per acre

Herbicide and TraitHerbicide and Trait

SeedSeed

U.S. Grower System CostU.S. Grower System CostRoundup Ready SoybeansRoundup Ready Soybeans

Herbicide CostHerbicide Cost

Trait CostTrait Cost

15

EU Import Approvals Pending, but Business EU Import Approvals Pending, but Business Strategy in Process To Expand Market ChoicesStrategy in Process To Expand Market Choices

European UnionEuropean UnionSituationSituation

Import approvals needed for free flow of grainImport approvals needed for free flow of grain Expands market potential in Americas Expands market potential in Americas

NearNear--term, Roundup Ready corn keyterm, Roundup Ready corn key

11 Regulatory AlternativeRegulatory Alternative 22 Business AlternativeBusiness Alternative Pursue business approach to expand Pursue business approach to expand

U.S. marketU.S. market

New grower initiatives under way New grower initiatives under way to ensure market availability for to ensure market availability for biotech grainbiotech grain

We Buy All Corn, All YearWe Buy All Corn, All Year

Advance products under new EU Advance products under new EU regulationsregulations

Monsanto focused on importsMonsanto focused on imports 23 products in regulatory queue under 23 products in regulatory queue under

Directive 2001/18; 12 from MonsantoDirective 2001/18; 12 from Monsanto

Roundup Ready corn (NK603) Roundup Ready corn (NK603) approved approved for importation and whole for importation and whole corn feed in July 2004corn feed in July 2004

NK603 Food application in queueNK603 Food application in queue

Round 1: Global Expansion & Value CaptureRound 1: Global Expansion & Value Capture

16

Enhanced Channeling Could Expand Market Potential Enhanced Channeling Could Expand Market Potential for Roundup Ready Corn in U.S.for Roundup Ready Corn in U.S.

Business ApproachBusiness Approach Website indicates to farmers Website indicates to farmers

which elevators in their area which elevators in their area accept biotech grain not yet accept biotech grain not yet approved for import into the approved for import into the European UnionEuropean Union

Communication and education Communication and education program under wayprogram under way

Percent of growers citing grain Percent of growers citing grain marketing concerns has marketing concerns has dropped from roughly 60% to dropped from roughly 60% to nearly 30% in past year*nearly 30% in past year*


*Based on Roundup Ready corn surveys taken in fall of 2003 and *Based on Roundup Ready corn surveys taken in fall of 2003 and spring of 2004 in Eastern Iowa/Northern Illinois regionspring of 2004 in Eastern Iowa/Northern Illinois region

17

Brazil Value Capture System Operating SmoothlyBrazil Value Capture System Operating Smoothly

BrazilBrazil

99 GrainGrain--based based system system implementedimplemented

99 Over 95% of grain originators in Over 95% of grain originators in the territory the territory under contract under contract

99 100% of harvest has been 100% of harvest has been delivereddelivered

2004 Forecast for Brazil Value Capture System2004 Forecast for Brazil Value Capture System

Soybean Soybean harvest in harvest in territoryterritory6 million 6 million metric metric tonstons

11 CompleteComplete 22 To DoTo Do Monitor and audit progress Monitor and audit progress Collect remaining royalty Collect remaining royalty

payments from partnerspayments from partners

XX( Average 2004 Average 2004 grower pricegrower price$3.50 US $3.50 US dollars dollars (10 reais)(10 reais) ) Grain partner Grain partner shareshare Implementation Implementation costscosts__ == Expected Expected contribution contribution to earnings to earnings per share in per share in 20042004Neutral to Neutral to Slightly Slightly

NegativeNegative

Sale of Roundup Sale of Roundup Ready soybean Ready soybean varieties for this varieties for this

area requires new area requires new regulatory regulatory approvalsapprovals

Varieties from Varieties from Argentina are Argentina are adaptable to adaptable to

this areathis area

40 million planted soybean acres40 million planted soybean acres

10 million planted soybean acres10 million planted soybean acres

XXPercent Percent

Roundup Roundup ReadyReady


Economy & Finance

monsanto 2004 08a