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It pays to listen to consumers: a variety case study

It did not start on a farm. Nor did it start in a soybean test plot. Instead,
it started with a dozen cups of coffee, and with a new consumer-focussed team
at Monsanto chatting with leading US food processors. It now turns out those
coffees will earn North America's soybean growers approximately $20 million
extra in 2007, and much more in the future.

Ontario soybean growers will plant 10,000 acres of Vistive low linolenic soybeans
this spring, earning a minimum 25 cents a bushel premium on their harvests.
If experience across the border is any guide, that acreage will quickly swell.
In the US, American growers planted 500,000 acres last year and are expected
to push plantings to at least 1.5 to 2.0 million acres in 2007.

The reason they are planting Vistive soybeans is because it is what consumers
want.

That sounds simple, like it should be how agriculture always works. But it
has long proved an unsolvable puzzle to link consumers and farmers. Until now,
consumers only talked to grocery stores, who only talked to food manufacturers,
who only talked to crop processors, who did not really talk to farmers about
anything except delivery schedules and prices.

Monsanto's effort to change that led directly to Vistive's premium opportunity,
says Kurt Wickstrom, St. Louis based US soybean traits manager for Monsanto.
It began with Monsanto re-inventing how it decides where to target its research
investment, which now runs in the order of $1.5 million a day.

Within Monsanto, Wickstrom explains, the company created a unique, dedicated
food strategy team, tasked with forging relationships with key food companies
in order to better understand processors and consumers. And almost the first
thing this team heard five years ago was that processors were grappling with
how they could meet a coming Food and Drug Administration order that foods be
labelled for trans fats starting in 2006.

Trans fats are linked to heart disease. That is why the FDA wanted consumers
to be able to look at the 'nutrition facts' labels on their foods and instantly
know whether they would be increasing their trans fat intake. Yet trans fats
are also a fact of life with hydrogenated soybean oil, the number one source
of American vegetable oil, and the market for 40 to 44 million acres of US soybeans
a year.

When health conscious consumers started demanding foods with less or no trans
fat, the food makers worried about how they could maintain their sales of everything,
from baked goods to margarines.

Back at Monsanto, the team's findings led to a detailed search of available
genetics, and the discovery that a low linolenic trait the company had been
working with for nearly a decade had the potential to reduce and even eliminate
trans fats from processed foods.

The genetics were not in commercial varieties, a process that would normally
take six to seven years, Wickstrom reports. Because of the food strategy report,
Monsanto pumped major resourcing into the project and cut that time down to
three years. "Not long ago that wouldn't have been possible," Wickstrom
says, "especially since we insisted that growers would not have to compromise
on yield or agronomics to grow Vistive soybeans. We insisted that the premium
had to be a premium, not compensation for yield you'd be sacrificing."

Meanwhile, the food strategy team worked alongside crop teams to build bridges
with processors and grower associations so all sectors of the industry could
be ready to turn on the tap when Vistive soybeans hit the market, providing
food makers with a consistent, high quality supply. The United Soybean Board,
for example, quickly saw the potential, says John Becherer, lead staffer for
the organization. "This could add $100 million to the income of soybean
growers," Becherer says.

Soon, processors in the US such as Cargill as well as the country's leading
food manufacturers were on side as well. "Our goal is to make use of the
most innovative ingredients possible and to encourage the accelerated production
and adoption of low linolenic oils so the public will benefit from this breakthrough
technology," Kelloggs president, David Mackay said in a December 2005 release
announcing that the company would be switching to Vistive soybeans.

In Ontario, according to Dan Wright, Monsanto traits manager for eastern Canada,
Vistive soybean planting will start in 2007 with 10,000 acres of low linolenic
Hyland and Dekalb brand varieties planted in Essex and southern Kent counties.

These varieties contain less than three percent linolenic acid, compared to
eight percent in ordinary soybeans, Wright points out. Linolenic fat gives soybean
oil products a low melting point, so they are liquid at room temperature, making
them unacceptable if you are a baker or a margarine maker. As well, higher levels
of linolenic acid reduce shelf life, contributing to off flavours.

To overcome those drawbacks, oil processors put soy oil through a process called
hydrogenation. Hydrogenation changes the profile of linolenic and other unsaturated
fatty acids to improve stability and shelf life. This eliminates the linolenic
fat, solving the stability problem. However, the process also creates trans
fatty acids, which a stack of medical studies link to increased risk of heart
and circulatory disease.

Surveys prove that Canadian consumers are concerned about trans fats, just
like their American counterparts. In fact, Canada's new trans fat labelling
laws are even tougher than US standards.

Monsanto Canada has begun talks with processors and food companies to create
awareness that oil from Vistive soybeans allows them to stay with soybean oil,
while reducing or eliminating trans fats. At press-time, Monsanto had not yet
secured a buyer for the 2007 Ontario crop. Even so, the company says it is guaranteeing
growers the 25 cent premium on enrolled acres in 2007.

"We're going to take the risks that we need to take," says Mike McGuire,
head of Monsanto's corn and soybean seed and genetics business in eastern Canada.
"If we don't get started, a network will evolve with processors buying
US low linolenic. We think Canada should get there first."

Industry support is widespread. "This is a great example of innovation
and demand being driven by what the market is asking for," says Jim Grey,
general manager of Ontario Soybean Growers. "It can only make the entire
value chain healthier."

Plus, says McGuire, "This isn't only about low linolenic soybeans."
Under the Vistive label, Monsanto is speeding ahead with traits that will add
new heart-healthy benefits, such as high omega-3 and low stearate varieties.

"We're seeing the benefits of listening to the consumer and we aren't
going to stop," McGuire says. "This is just the starting point of
a new business model. By listening to the consumer, growers are going to be
generating more premiums without being saddled with any additional production
or yield risks."

Wickstrom agrees, and sees the trend picking up steam. "The news about
trans fat has led consumers to start looking at the nutrition facts panels on
food products," Wickstrom says. "The opportunities are enormous, both
for consumers and for growers." -30-