St. Louis, Missouri
March 12,  2001

Monsanto Company (NYSE: MON) has recast its sales and earnings for each quarter of 2000 to provide information on how its revenue and earnings streams would have been distributed following the company's adoption of the revenue recognition guidelines released by the U.S. Securities and Exchange Commission. Commonly called SAB 101 (Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements), this accounting change affected the distribution of Monsanto earnings in individual quarters, but had no material effect on the company's annual
earnings. More detailed financial statements can be found on our website: www.monsanto.com . 

* Reported net income and reported pro forma net income are before the cumulative effect of an accounting change.
** Pro forma results assume Monsanto's reduced debt level as applied to all of 2000. 

2001 Guidance 

As previously announced, Monsanto's management expects sales growth in 2001 similar to the 2000 revenue growth rate of 5 percent. This growth is based on expected increased sales of seeds and Roundup herbicide, as well as higher revenues from biotechnology traits. Net income, if special items are excluded, when compared with 2000 pro forma results that exclude special items, should increase between 9 percent and 13 percent. This growth is expected to be driven by higher gross profit and continued cost management. 

Monsanto's management also intends to continue to reduce selling, general and administrative (SG&A) costs as a percent of sales. SG&A costs as a percent of sales were reduced from 23.6 percent in 1999 to 22.8 percent in 2000. A similar trend is expected in 2001. Research and development (R&D) expenses ended 2000 at 10.7 percent of sales, down from 13.2 percent of sales in 1999. For 2001, management expects a similar R&D expense-to-sales ratio. 

The company also plans to improve its free cash flow (cash provided by operations less cash required by investing activities), and expects to have positive free cash flow in 2001. In order to meet this goal, management is focused on reducing trade receivables as a percent of sales by one-to-two percentage points. Inventories will continue to be managed consistent with year-end 2000 balances in the range of 23 percent of sales. 

Capital spending levels are expected to be 10 percent to 12 percent lower in 2001 than capital
expenditures of $582 million recorded in 2000. Spending will decline as the majority of the company's projects to integrate acquired seed businesses and expand the manufacturing capacity for Roundup in Brazil will be completed during 2001. Further reductions will be achieved in 2002. 

Historically, Monsanto has recorded its highest levels of sales and income in the first half of the year, consistent with the purchasing and growing patterns of growers in North America, the company's largest market. Monsanto historically has posted net losses during the second half of the year. First-quarter 2001 net income is expected to be flat to slightly lower than first quarter 2000 pro forma net income of $67 million. The first quarter is becoming less significant for Monsanto as more sales shift from the first quarter to the second, particularly with the adoption of SAB 101. 

Monsanto Company, an 85 percent-owned subsidiary of Pharmacia Corporation (NYSE: PHA), is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. 

Roundup is a registered trademark owned by Monsanto Company. 

Company news release
N3378