St. Louis, Missouri
July 23, 2002

• Monsanto Company Reports Second-Quarter 2002 Earnings per Share of 56 Cents Per Share, Including 38 Cents Per Share for Bad-Debt Reserve and 16 Cents Per Share for Restructuring
• Reported net income of 56 cents per share includes the argentine bad-debt reserve of $100 million aftertax (38 cents per share) and restructuring charges of $43 million aftertax (16 cents per share).
• Globally, Roundup herbicide volumes and prices were down.
• U.S. acreage for Monsanto's biotech traits in 2002 estimated to increase 5 percent to 89.5 million acres.

Monsanto Company (NYSE: MON) today reported sales and earnings for the second quarter of 2002.

"We delivered second-quarter results as discussed in our mid-June conference call," said Monsanto President and Chief Executive Officer Hendrik A. Verfaillie. "Although weather conditions affected our Roundup herbicide business, our U.S. business is performing well overall.

"In Latin America, consistent with our strategy, we began to implement the tactics necessary to reduce risk," Verfaillie said. "Even with these challenges, cash generation is improving as we address working capital."

Sales

Second-quarter 2002 net sales declined to $1.6 billion, and sales for the first six months of 2002 of $2.8 billion also were lower compared with sales in the first half of 2001. Wet spring weather conditions in the United States delayed planting of corn and soybeans, which reduced sales of Roundup. The company also had lower sales in Latin America as it implemented several actions to reduce risk there as outlined in the June 12 news release. The second-quarter sales comparison also was affected by the company's change to a royalty system for its biotechnology traits, which was implemented in 2001. As a result, trait fee revenues previously recognized in the second quarter are now recorded in other quarters.

Reported Earnings

Monsanto's second-quarter 2002 net income was $147 million, or 56 cents per share. For the comparable period last year, net income was $389 million, or $1.47 per share.

The significant items affecting the quarterly comparison include a bad- debt reserve of $100 million aftertax (38 cents per share) for potential uncollectible receivables in Argentina and aftertax restructuring charges of $43 million (16 cents per share) associated with the plan announced in April to rationalize certain facilities and reduce the work force. In the second quarter of 2001, Monsanto recorded special charges of $30 million aftertax, primarily associated with restructuring actions.

Additionally, net income in 2002 was affected by lower revenues of Roundup herbicide, lower Latin American sales because of the company's changes to its business model there, and the aforementioned change to a royalty system for biotechnology traits announced last year. Included in 2002 results was a net gain of $22 million aftertax (8 cents per share) related to the sale of certain herbicide assets to Nissan Chemical Industries, Ltd., for use in the Japanese market.

The company has completed its initial impairment analysis required by the new Standard of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." As previously disclosed, an impairment of $1.8 billion aftertax related to Monsanto's corn and wheat businesses was recorded as a cumulative effect of an accounting change as of Jan. 1, 2002.

For the six-month period, the company reported a net loss of $1.6 billion, or a loss of $6.02 per share, including the impairment under SFAS No. 142 of $6.90 per share. Reported net income for the same period in 2001 was $444 million, or $1.68 per share.

Cash

Monsanto improved its free cash flow (cash flow from operations less cash required by investing activities) for the second quarter and first half of 2002 by approximately $200 million compared with free cash flow in the same periods last year. The improvement in cash flow was primarily a result of lower capital expenditures and improved collections of receivables. Also contributing to free cash flow was proceeds from the asset sale in Japan, which was partially offset by a payment related to a legal dispute with Aventis.

Segments

Monsanto reports its results in two segments: Agricultural Productivity and Seeds and Genomics.

Agricultural Productivity: In the Agricultural Productivity segment, global sales declined for the second quarter to $1.3 billion as compared with sales of $1.6 billion in the second quarter of 2001. Sales for the first half were just under $2 billion, compared with sales of $2.4 billion in the first half of 2001.

Earnings before interest and taxes (EBIT), declined in both the quarterly and first-half periods. EBIT was $426 million for the second quarter of 2002, compared with EBIT of $632 million in the second quarter of 2001. During the first six months of 2002, the company recorded EBIT of $454 million, versus EBIT of $771 million in the same period last year.

Lower sales of Roundup herbicide, especially in the United States and Latin America, contributed to the decline in EBIT for this segment. Wet spring weather in key U.S. corn and soybean planting regions this year reduced applications of Roundup herbicide.

Seeds and Genomics: Sales for the Seeds and Genomics segment were $241 million for the second quarter of 2002, compared with sales of $437 million in the same period last year. For the first half of 2002, sales for this segment were $826 million, versus $935 million in the same period last year.

EBIT declined to a loss of $196 million, from EBIT of $14 million in the second quarter of 2001 for the Seeds and Genomics segment. For the six-month period, EBIT declined to a loss of $80 million, compared to a loss of $18 million in the first-half of 2001. Lower EBIT primarily reflected the timing difference in trait revenue recognition between quarters arising from the change to a royalty system in 2001. Actions taken to change the company's business model in Brazil and Argentina because of unfavorable market conditions there also affected sales and earnings.

In the U.S. market, Monsanto's Asgrow and DEKALB seeds performed well in the 2002 growing season. Monsanto's soybean brands are expected to maintain their market share position in a competitive soybean market following a two- point gain in 2001. In corn, a two-point market share gain is expected versus last year's share.

Monsanto estimates that its insect-resistant and Roundup Ready biotechnology traits were used on approximately 89.5 million acres in the United States during the 2002 growing season, an increase of 5 percent compared with 84.9 million acres in the previous year. Acreage estimates for Monsanto's biotechnology traits in the United States by crop follow:
 

Est. 2002 (M of acres) 2001 (M of acres) % change % of 2002 crop acres w/MON trait % of 2001 crop acres w/MON trait U.S. Roundup Ready soybean trait 58.0 54.8 6% 79% 74% U.S. Roundup Ready corn trait 5.5 3.4 62% 7% 4% U.S. Yield-Gard corn traits 14.5 14.3 1% 18% 19% U.S. MON "stacked" corn traits 1.5 1.2 25% 2% 2% Total MON corn traits 21.5 18.9 14% 27% 25% U.S. Roundup Ready cotton traits 5.0 5.1 (2)% 35% 32% U.S. Bollgard cotton traits 0.5 0.5 -- 3% 3% U.S. MON "stacked" cotton traits 4.5 5.6 (20)% 31% 36% Total MON cotton traits 10.0 11.2 (11)% 69% 71% Total MON U.S. trait acres 89.5 84.9 5% 54% 51%