St. Louis, Missouri
June 12, 2002

Monsanto Company (NYSE: MON) today announced it is taking additional steps to reduce risk in Latin America because of continuing economic and market uncertainties there. As a result of these and other factors discussed below, the company is lowering its second- quarter and full-year 2002 and 2003 earnings per share (EPS) guidance.

"Our North American, European and Asian businesses are healthy and meeting our expectations," said Hendrik A. Verfaillie, Monsanto president and chief executive officer. "However, we've determined that we must make additional changes in how we approach the Latin American business. These aggressive actions in Latin America will improve the longer-term viability of our business there and will reduce our risk going forward."

Second-Quarter Guidance

Wet weather in key U.S. corn and soybean growing areas this spring has resulted in planting delays, and corresponding delays in the applications of Roundup herbicide. The company expects roughly a 20-cents-per-share shift in expected earnings from second-quarter results to third-quarter results because of these delays.

In addition, the unfavorable market conditions in Latin American agricultural markets continue to affect Monsanto's sales in that region. The company is implementing plans to improve its performance in the herbicide and corn seed markets while maintaining its leadership positions. These actions are expected to negatively affect second quarter earnings by approximately 10 cents per share.

Monsanto management also expects to establish a reserve in the second quarter in the range of $120 million to $150 million for potential uncollectable accounts receivables in Argentina.

Excluding the Argentine reserve and the previously announced restructuring, the company now expects second-quarter 2002 EPS to be $1.10 to $1.15, compared with earlier guidance of $1.40 to $1.45 for the quarter.

Full-Year Guidance

In anticipation of the upcoming Latin American selling season in the second half of the year, the company will continue to operate with cash- or grain-only sales terms in Argentina. Additionally, it will reduce its working capital in Brazil and Argentina, and because of market conditions in Argentina, the company will exercise its right to use collateralized products to settle receivables there as appropriate. These steps will reduce sales and earnings for the year. These business approaches are designed to substantially reduce the company's credit risk exposure and working capital in both Brazil and Argentina for the year.

Management is revising its estimate for full-year 2002 EPS to approximately $1.50, which includes the effect of taking aggressive steps to reduce the company's risk in Latin America, but excludes the reserve for potential uncollectable accounts receivables in Argentina, and the previously announced restructuring actions. (See attached table for details.) The company's previous guidance for 2002 EPS was $2.23 to $2.27.

Monsanto management also is confirming its free cash flow (cash flows from operations less cash required for investing activities) guidance for 2002 of $400 million to $460 million, including the actions mentioned above. The company also is providing guidance for full-year 2003 EPS in the range of $1.90 to $2.05.

Goodwill Impairment Update

Monsanto has completed its initial impairment analysis required by the new Standard of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets," which was adopted by the company as of Jan. 1, 2002. This new accounting standard eliminates goodwill amortization and changes the method of determining whether there is goodwill impairment to a discounted cash flow method instead of the undiscounted cash flow method used previously. As a result of its review, Monsanto plans to record an impairment of approximately $2 billion pretax related to its corn and wheat businesses. The company plans to record this impairment as a cumulative effect of an accounting change for the first half of 2002, and this impairment is excluded from the revised second-quarter and full-year EPS guidance discussed above.

Monsanto Company, an 84 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 is a trademark owned by Monsanto Technology LLC.

References to Roundup products in this release mean Roundup branded and other glyphosate-based herbicides, excluding lawn and garden products.