July 25,  2001

Monsanto net income up 5 percent to $421 million for second quarter 2001; earnings per
share up 3 percent to $1.60

Sales of $2 billion flat for the second quarter; first-half sales flat at $3.3 billion.
Increase of 4 percent sets quarterly record for global sales of Roundup herbicide; U.S. branded
sales up 5 percent in key use season.

Other Developments

U.S. acreage for Monsanto's biotechnology-enhanced traits in 2001 estimated to rise by 11
percent to 80 million acres, with Roundup Ready soybeans and cotton traits particularly strong.
Roundup Ready cotton approved for planting in Argentina.

* EPS for second-quarter 2000 and first-half 2000 were calculated using pro forma shares
outstanding.
** Net income and net income diluted EPS are before nonrecurring items (see note 7 for details).
Results for 2000 are on a pro forma basis, assuming Monsanto's reduced debt level as applied to all of 2000. EPS for all 2000 periods was calculated using pro forma shares outstanding.

St. Louis, Missouri
July 25, 2001

Monsanto Company (NYSE: MON) today reported sales and earnings for the second quarter of 2001.

"Our U.S. business results were key to the company's overall earnings improvement for the second quarter," said Monsanto President and Chief Executive Officer Hendrik A. Verfaillie. "U.S. customers continued their strong demand for our family of Roundup herbicides, and farmers also continued to plant more seeds containing our biotechnology-enhanced traits that help them reduce their costs and better protect the environment."

Sales

Second-quarter net sales were flat at $2 billion. Sales would have been 2 percent higher, if the effect of foreign currency exchange was excluded. Global sales of Roundup herbicide increased 4 percent and set a quarterly record, led by gains in the United States and Argentina during the second quarter of 2001. Sales for the seeds and genomics segment were down 20 percent compared with second-quarter 2000 results. Higher-than-normal returns of conventional corn seed in Latin America negatively affected sales by roughly $70 million.

Sales for the first six months of 2001 of $3.3 billion also were flat compared with sales in the first half of 2000. Solid U.S. sales of Roundup herbicide and increased revenue from biotech traits were offset primarily by corn seed returns in Latin America. Sales during the first six months of 2001 would have improved by almost 2 percent compared with first-half 2000 sales, if the effect of foreign currency exchange was excluded .

Reported Earnings

Second-quarter 2001 net income improved to $389 million from last year's second-quarter net income. Earnings per share (EPS) for the quarter increased to $1.47 per share. For the first half of 2001, the company reported net income of $444 million, compared with 2000 first-half net income of $265 million. EPS for the six-month period increased to $1.68 per share.

2001 Second-Quarter and First-Half Earnings vs. 2000 Pro Forma Second-Quarter and Pro
Forma First-Half Earnings

As discussed in this section, net income excludes nonrecurring items which represents net income before an extraordinary charge in 2001 for the early retirement of debt, the cumulative effect of an accounting change effective Jan. 1, 2000, and restructuring and other special items. As previously stated, the company expects to take $425 million to $475 million in total pretax restructuring and other special items for the two-year period ending Dec. 31, 2001, of which $330 million was recorded during 2000 and the first half of 2001 .

Monsanto's pro forma net income and earnings per pro forma share for 2000 also have been adjusted to reflect the effect of a capital contribution from Pharmacia Corporation and proceeds from the company's initial public offering (IPO). This adjustment is reflected as of Jan. 1, 2000, for 2000 results.

Second-quarter net income increased 5 percent to $421 million, from $402 million in the second quarter of 2000. In the second quarter of 2001, the company recorded nonrecurring aftertax charges of $32 million, primarily associated with our restructuring action to exit product lines or businesses and to focus our efforts on key crops. In the second quarter of last year, Monsanto recorded nonrecurring aftertax charges of $126 million, primarily associated with our restructuring plan. EPS for the second quarter of 2001 increased 3 percent to $1.60 per share.

For the six-month period, net income increased 4 percent to $489 million in 2001, from $469 million in the same period last year. The nonrecurring items in both six-month periods were primarily associated with our restructuring plan to focus our efforts on key crops. The company recorded nonrecurring aftertax charges of $45 million in the first half of 2001, while nonrecurring aftertax charges of $149 million were recorded in the first six months of 2000. First-half 2001 EPS was up 2 percent to $1.86 per share. Improved cost management in the quarter and first half of 2001 contributed to increased earnings.

Segments

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

Agricultural Productivity: In the Agricultural Productivity segment, global sales were up 8 percent for the second quarter and 4 percent for the first half of 2001, led by increases for branded Roundup herbicide in the U.S. and Argentinean markets.

If special items are excluded, earnings before interest and taxes (EBIT), improved in both periods, driven by increased sales and lower expenses. EBIT rose by 7 percent to $662 million for the second quarter of 2001. EBIT increased slightly to $814 million in the first six months of 2001 versus $812 million in the first six months of 2000.

Seeds and Genomics: Sales for the Seeds and Genomics segment decreased $109 million, or 20
percent, to $437 million for the second quarter of 2001. For the first half of 2001, sales for this segment decreased 10 percent, from $1 billion to $935 million, primarily because of seed returns in Latin America. However, year-to-date sales of Roundup Ready soybean traits and cotton traits were particularly strong.

EBIT, if special items are excluded, declined by 36 percent to $35 million in the second quarter of 2001 for the Seeds and Genomics segment. For the six-month period, EBIT improved by $25 million, from a loss of $13 million in the first half of 2000 to earnings of $12 million in the same period this year. Better cost management and increased revenues from biotechnology traits drove the first-half EBIT improvement.

Other Developments

Monsanto estimates that its insect-resistant and Roundup Ready technologies were used on
approximately 80 million acres in the United States during the 2001 growing season, an increase of 11 percent compared with 72 million acres in the previous year. Initial results indicate that acres planted with Roundup Ready crops (soybeans, corn and cotton) rose 17 percent compared with 2000 acres. Acreage estimates for Monsanto's biotechnology traits in the United States by crop follow.

In late April, Monsanto and its seed partners were granted final approval to commercialize Roundup Ready cotton in Argentina. The joint venture company CDM Mandiyu S.R.L. plans a small commercial launch of Roundup Ready cotton seed this fall. Argentinean farmers have widely adopted other Monsanto traits for cotton, corn and soybeans during the past several years. Roundup Ready cotton will offer cotton growers there a more flexible weed control system with significant environmental and economic benefits

Future Guidance

Because of the continuing effects of foreign currency exchange, Monsanto's sales growth for 2001 is expected to be in the range of 2 percent to 4 percent for the year. As previously stated, 2001 earnings, when compared with 2000 pro forma results that exclude nonrecurring items, should increase between 9 percent and 13 percent. Third-quarter 2001 EPS, excluding nonrecurring items, is expected to be approximately the same with third-quarter 2000 EPS, excluding nonrecurring items, which was a loss of 13 cents per share.

The company also reiterated that it 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.
 
Monsanto Company, an 85 percent-owned subsidiary of Pharmacia Corporation, is a leading global
provider of technology-based solutions and agricultural products that improve farm productivity and food quality.

Roundup and Roundup Ready are trademarks owned by Monsanto Technology LLC.

Company news release
N3671 is next