North American soybean farmers will receive preferred access to new technology, added risk protection, and future vision for industry

Monsanto is launching several new soy-based initiatives to add value to U.S. soybean production, including providing preferred access to some of the newest technology coming out of the company's research and development program. Monsanto Executive Vice President Carl Casale made the announcement today, detailing a series of actions to support market development, risk management and strategic planning for the U.S. soybean industry. The initiatives are part of what the company calls its "U.S. Soybean Farmer Partnership."

"U.S. soybean farmers are some of the most progressive producers in the world evidenced by their overwhelming adoption of the first biotechnology product, Roundup Ready soybeans, 10 years ago," said Casale, speaking from the 2006 Commodity Classic in Anaheim, Calif. "That same forward-thinking mentality is needed again as the industry hits a critical juncture in determining its future. To compete in a national and international market, the U.S. soy industry is going to have to look for new ways to add value to their crop."

"We first committed to adding value to soy producers when we brought Roundup Ready soybeans to the market," said Casale. "That effort was highly successful, and that's why we continue to look for ways to add new value and opportunities for U.S. soybean farmers."

To that end, the company is launching initiatives in three areas that are fundamentally important to the success of U.S. soybean farmers. These areas include:

Market Development

Over the past several years, Monsanto has focused much of its soybean research on enhancing the quality and composition of soybeans to open up new market opportunities for soybean oil. Now, U.S. farmers will have preferred access to the results of this initial research, including future products from the VISTIVE TM soybean portfolio.

VISTIVE is the brand name for Monsanto's line of soybean oils that help reduce and/or eliminate trans fatty acids (trans fats). The first product, VISTIVE low-linolenic soybeans, was launched in 2005. VISTIVE low-linolenic soybean oil is in demand by the food industry because it reduces the need for partial hydrogenation of soybean oil, helping food companies reduce the presence of trans fats in their products. This year, nearly 500,000 acres will be planted in expanded geographies throughout the Midwest. Processors are currently paying farmers a premium of $0.25 to $0.45 a bushel for VISTIVE soybeans.

"Products like VISTIVE low-lin would not be possible if it weren't for U.S. farmers who adopted and invested in Monsanto's initial soybean technology early on," said Casale. "When we launched Roundup Ready soybeans, it was a brand new technology sold in a totally different business model, but pioneering U.S. farmers embraced it because they saw the value it provided. We want to recognize their support by making U.S. soybean farmers the preferred source of global production for future premium VISTIVE varieties, for as long as they can meet food company demand."

"There is a great demand from U.S. food companies for improved soybean oil, and that's because consumers here and in other world areas are becoming more concerned about the nutritional value of their food," continued Casale. "As long as U.S. producers can keep up with the food companies' demand and do so in a cost-competitive way, it only makes sense that they should be provided this opportunity."

The VISTIVE line was developed through discussions with food companies about their manufacturing needs. Kellogg Company, for instance, recently announced that it will use oil from VISTIVE low-linolenic soybeans as part of a major initiative to reduce or eliminate trans fats in a number of its products. Ongoing discussions with food companies have helped Monsanto researchers identify other traits that will increase their desire for soybean oil. The next VISTIVE offering is likely to be a high-stearate oil that will offer a healthier solution for food products that require solid fat for functionality. High-stearate oil is in high demand because it enables food manufacturers to reduce or even eliminate the need for hydrogenation for products such as margarines and shortening. This product could be on the market before the end of the decade. Other VISTIVE products also in development include mid-oleic, low saturate, and combinations of these two oils with low-linolenic. These products can further improve stability and reduce the levels of saturated fats.

U.S. farmers will also be given preferred access to produce several additional soybean products that will result in new market prospects for soybean oil. This includes soy crops that can deliver vegetable oils enriched with omega-3 fatty acids. Omega-3 fatty acids, typically found in fish oil, have been shown to have many heart-healthy benefits such as lowering elevated blood triglyceride levels, stabilizing irregular heart beat (arrhythmia) and reducing blood pressure.

"For the U.S. soybean industry to compete globally, it's critical that we develop compositional traits such as VISTIVE to differentiate the soybean oil market," says American Soybean Association President Bob Metz. ASA is working closely with soybean processors and seed companies to promote new soy-based solutions to replace partially hydrogenated soybean oil. Longer-term, ASA continues to support research that identifies new uses and market opportunities for soybeans grown in the U.S.

"Low-linolenic oil alone could add an estimated $100 million per year to the value of soybean commodities," says Metz. "With today's announcement, U.S. soybean farmers can look forward to receiving preferred access to the best soy oil traits in Monsanto's food trait platform. This puts U.S. soybean producers in the best competitive position today."

Risk Management

Monsanto also announced that it is piloting a new Double Crop Risk Protection program for soybean farmers in three states. Farmers in the pilot states who double-crop Roundup Ready soybeans and have complete soybean crop failure are eligible to receive a refund payment from Monsanto. In 2006, this will be conducted as a pilot program in Arkansas, Missouri and North Carolina-chosen because of the high amount of double crop soybean acreage and the range of geographies they represent.

"Many farmers who double crop soybeans recognize the value inherent in planting Roundup Ready soybeans," said Casale. "But because they plant later in the season, they incur greater risk due to moisture variability, early freeze and other climate factors. We've long recognized farmers' risk, as evidenced by our Roundup Rewards program, and are evaluating this tool to address the unique issues faced by our customers."

Farmers who purchase Roundup Ready soybean seed, plant it in a double crop system, use a Roundup agricultural herbicide and suffer a complete crop loss because of climactic factors are eligible for a seed investment refund of up to $15 per bag. Farmers can ask a Monsanto sales representative or seed companies for more details.

Monsanto will evaluate the Double Crop Risk Protection pilot program following the 2006 planting season to determine its value to customers and potential for expanding it to additional areas in 2007.

Strategic Planning

Monsanto will support and provide resources for a comprehensive study looking at what the future holds for the soybean industry in the year 2020. Soy 2020, coordinated by the United Soybean Board, will examine current trends and identify economic, political and competitive factors that will shape the next 15 years of soy production. The study will look at ways the industry can meet the demands of customers overseas as well as other market segments such as animal agriculture, biodiesel and food manufacturing.

"For U.S. soybean farmers to remain competitive, we need to stay ahead of the trends and in some cases, even set the trends. Just as important, we need to ensure that we are providing the kind of quality product that meets our customers' demands and that positions the United States as the supplier of choice for soy around the globe," says United Soybean Board Chairman Curt Raasch. "We look forward to working with Monsanto and others on this study that will become a vital tool in long-term strategic planning for all players in the soybean industry."

"As a technology provider, a study such as this can help guide us as we evaluate where our research should be focused to match up with the industry's goals," agrees Casale. "There may be entirely new markets and opportunities that are identified, and we strongly support efforts to identify the drivers that will help the U.S. maintain its competitive edge." Details on the Soy 2020 study are still being determined. More information will follow as it becomes available.

Monsanto will continue to seek out new opportunities and develop programs that will positively impact the future of U.S. soybean production.

"We will continue to grow our global business, but we cannot forget that U.S. agriculture is the foundation of our success," Casale said. "In this country we have the benefit of serving the most technologically advanced farmers, who appreciate innovative new products. Because of this, we can offer U.S. farmers some unique advantages as we all strive to compete globally."

Monsanto Company is a leading provider of technology-based solutions and agricultural products that improve farm productivity and food quality.