[6/29/05]: Drought in Brazil Could Dry Up Monsanto's Sales

SOURCE: Polaris Institute--Brazil
Media Release
29th June, 2005

Drought in Brazil has caused a severe 72% drop in soybean yields in the
heaviest Round-Up Ready soy using state. The Polaris Institute calls on the
company to review its FY06 earnings estimates that include new Brazilian
sales that will begin this fall. In particular, what pricing changes should
investors expect to address this crisis and how will those changes affect
next year's EPS estimates?

Rio Grande do Sul-- the biggest adopter of Monsanto technology ˆ has been
the hardest hit by the drought. The state is also home to Monsanto‚s
fledgling royalty collection system. Brazil‚s agricultural department
estimates that yields are down 72% in Rio Grande do Sul. Monsanto
representative Ricardo Miranda concedes that yield losses are 80% in some
areas. Soy exports from Rio Grande do Sul are expected to drop 95%.

The effects of such a severe drought are predictable. In some cases, soy
crushers are halving their staff. Cargill is even closing a processing
plant for a month for lack of inputs. Farmers have defaulted on one-third
of the government loans so far this year.

Farmers are taking notice. The president of the Rio Grande do Sul seed
association sites 25% higher crop losses in GE soy crops as compared with
conventional ones. Governor of Mato Grosso (25% of national soy production)
has publicly stated that he will not plant genetically modified soy next

"Farmers and farm groups are only now realizing the full financial impact of
this drought," said Etienne Vernet, South American Research Director of the
Polaris Institute. "Many Brazilian farmers who use Round-Up Ready soy will
be thinking twice about it next year."

"Despite the distressing facts of a severe drought, which some farmers are
blaming on Round-Up Ready soy, Monsanto has been consistently optimistic
about its prospects for Brazil in FY06," said David Macdonald, Analyst with
the Polaris Institute.

The Polaris Institute calls on the Monsanto to review what pricing changes
investors should expect in the Brazilian market and how those changes will
affect next year‚s EPS estimates.

For more info, contact:
David Macdonald, Tel: 613-237-1717 Cell: 613-725-7606
Etienne Vernet, Tel: +011 55 21 22 25 67 39