SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

                                    April 8, 2005

VIA FACSIMILE AND FEDEX
-----------------------

United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-0405
(202) 942-9528 (Fax)
Attention: H. Roger Schwall
           Gary Newberry
           Shannon Buskirk

      Re:  MONSANTO COMPANY
           Form 10-K, Filed November 3, 2004
           Form 10-Q, Filed January 10, 2005
           File No. 1-16167

Dear Messrs. Schwall and Newberry and Ms. Buskirk:

      Reference is made to the Staff's letter, dated March 30, 2005, setting
forth further comments to the response letter submitted to the Staff by Monsanto
Company ("Monsanto" or the "Company") on February 24, 2005, in response to the
Staff's initial comments to the Report on Form 10-K for the year ended August
31, 2004 (the "Form 10-K") and the Report on Form 10-Q for the quarter ended
November 30, 2004 (the "Form 10-Q") filed by Monsanto. Set forth below are the
Staff's comments, indicated in bold, and the Company's responses.

      FORM 10-K FOR THE YEAR ENDED AUGUST 31, 2004
      --------------------------------------------

      GENERAL
      -------

1.    WE UNDERSTAND YOU WOULD PREFER TO LIMIT COMPLIANCE WITH MANY OF OUR
      COMMENTS TO FUTURE FILINGS. WE ARE CURRENTLY CONSIDERING YOUR REQUEST IN
      RESPONSE TO THESE PRIOR COMMENTS.

           RESPONSE. As noted by the Staff in its March 30th letter, the Company
      has proposed to incorporate changes to its filings prompted by the Staff's
      comments on a going forward basis in all future filings. We understand
      that this proposal is being reviewed by the Staff, and we appreciate this
      consideration.

<PAGE>

Monsanto Company
April 8, 2005
Page 2

      ITEM 7, MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      -----------------------------------------------------------------------
      RESULTS OF OPERATIONS
      ---------------------

      FINANCIAL MEASURES, PAGE 24
      ---------------------------

2.    WE REVIEWED YOUR RESPONSE TO PRIOR COMMENTS 1 AND 2, AND NOTE THAT YOU
      HAVE PROPOSED TO REVISE THE TITLE OF YOUR NON-GAAP FINANCIAL MEASURE TO
      "ADJUSTED EBIT".  THE REVISED TITLE OF YOUR NON-GAAP MEASURES SHOULD NOT
      REFER IN ANY WAY TO EBIT AS THIS MEASURE IS NOT CALCULATED CONSISTENTLY
      WITH THE WIDELY KNOWN DEFINITION OF EBIT.  WE NOTE YOUR MEASURE OF EBIT
      IS BASED ON EARNINGS ADJUSTED FOR DISCONTINUED OPERATIONS AND CUMULATIVE
      EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE.  REVISE THE TITLE OF YOUR
      NON-GAAP MEASURE TO EXCLUDE ANY REFERENCE TO EBIT.

           RESPONSE. Prospectively Monsanto will begin using the widely known
      definition of EBIT, which is defined as "earnings before interest and
      taxes." Rather than revising the title of our previous non-GAAP financial
      measure and adjusting our calculation for discontinued operations and
      cumulative effect of a change in accounting principle, we will begin using
      the widely known definition in all future filings.

      NOTE 7. CUSTOMER FINANCING PROGRAM, PAGE 83
      -------------------------------------------

3.    WE HAVE REVIEWED YOUR RESPONSE TO PRIOR COMMENT 9, IN WHICH YOU DESCRIBE
      HOW THE CUSTOMER FINANCING PROGRAM COMPLIES WITH THE CRITERIA OF PARAGRAPH
      9 OF SFAS 140. YOUR RESPONSE, HOWEVER, DID NOT SPECIFICALLY ADDRESS THE
      SECOND PORTION OF OUR PRIOR COMMENT RELATING TO THE FIRST-LOSS GUARANTEE
      PROVIDED BY MONSANTO. PLEASE TELL US IF THIS GUARANTEE AFFECTS YOUR
      CONCLUSION THAT THE TRANSFERS OF CUSTOMER LOANS MEET THE CRITERIA OF SFAS
      140, PARAGRAPH 9.

           RESPONSE. At the time that the customer financing program was entered
      into, the entire arrangement including the first-loss guarantee provided
      by Monsanto was fully evaluated by the Company and its outside legal
      counsel, and the Company concluded that the customer loans are isolated
      from Monsanto as required by paragraph 9.a. of SFAS 140. Outside legal
      opinions support the position that the assets and liabilities of Great
      Plains Funding Corporation (Great Plains) would not be consolidated with
      Monsanto's assets and liabilities in the case of bankruptcy of either
      party, despite the existence of the first-loss guarantee. As described in
      our previous response, Great Plains makes loans directly to Monsanto's
      customers, who then pay off their trade receivables due to Monsanto. Also,
      although Great Plains is consolidated for accounting purposes, Monsanto
      does not have any ownership interest in Great Plains or such loans. We
      have addressed the first-loss guarantee in connection with paragraph 9.a.
      because we believe that the Staff's comment was intended to focus on the
      isolation requirement of this paragraph; however, we also note that we
      concluded that the first-loss guarantee does not affect the determination
      that the transfers of customer loans meet the criteria of SFAS 140,
      paragraphs 9.b. and 9.c. Please refer to our previous response for further
      discussion of our evaluation of paragraphs 9.b. and 9.c.

<PAGE>

Monsanto Company
April 8, 2005
Page 3

      NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS, PAGE 84
      -----------------------------------------------------

4.    WE HAVE REVIEWED YOUR RESPONSE TO PRIOR COMMENT 14.  YOU HAVE INDICATED
      THAT THE FIRST TWO COMPONENTS OF THE ARRANGEMENT, FOR $40 MILLION AND
      $45 MILLION RESPECTIVELY, WERE RECORDED AS INTANGIBLE ASSETS.  THESE
      ASSETS ARE COMPRISED OF A DATABASE OF INTELLECTUAL PROPERTY PRIMARILY
      MADE UP OF GENE SEQUENCING AND GENE LEADS, PROCESSES, LIBRARIES AND
      OTHER BIOLOGICAL MATERIALS.  TELL US WHY YOU BELIEVE THESE COMPONENTS
      SHOULD BE ACCOUNTED FOR AS INTANGIBLE ASSETS UNDER THE GUIDANCE OF SFAS
      2, PARAGRAPH 11(C) AS OPPOSED TO RESEARCH AND DEVELOPMENT COSTS TO BE
      EXPENSED UNDER PARAGRAPH 12.

           RESPONSE. The first two components of the arrangement are accounted
      for as intangible assets under the guidance of SFAS 2, paragraph 11(c),
      because the intangible assets have alternative future uses in various
      research and development projects that Monsanto is pursuing. The database
      of intellectual property contains specific materials that can be utilized
      in identifying and developing different desired traits (such as improved
      yields, drought-resistance and cold-resistance) across multiple crops
      (such as corn, soy and cotton).

5.    WE UNDERSTAND THE COLLABORATION AGREEMENT WITH CERES, INC. PROVIDES FOR
      ADDITIONAL PAYMENTS FOR THE PURCHASE OF RIGHTS TO SUBSEQUENTLY DEVELOPED
      TECHNOLOGIES FOR APPROXIMATELY $45 MILLION, WHICH HAS BEEN CAPITALIZED
      AS AN INTANGIBLE ASSET AT THE CONTRACT PRICE.  TELL US WHY THE
      ACQUISITION OF SUBSEQUENTLY DEVELOPED TECHNOLOGY OVER THE FIVE-YEAR
      AGREEMENT SHOULD BE ACCOUNTED FOR DIFFERENTLY THAN THE FUNDING OF A
      JOINT RESEARCH PROGRAM.  IT APPEARS THESE COSTS OF SUBSEQUENTLY
      DEVELOPED TECHNOLOGIES ARE SIMILAR TO RESEARCH AND DEVELOPMENT COSTS
      THAT WOULD HAVE OTHERWISE BEEN EXPENSED IN THE INCOME STATEMENT UNDER
      SFAS 2, SIMILAR TO THE AMOUNTS ASSOCIATED WITH THE JOINT RESEARCH
      PROGRAM COMPONENT.  IN YOUR RESPONSE, PLEASE ADDRESS WHY YOU HAVE USED
      THE CONTRACT PRICE IN VALUING THESE INTANGIBLE ASSETS VERSUS THE
      INTERNALLY DEVELOPED DISCOUNTED CASH FLOW VALUATION METHOD.  IN
      ADDITION, PLEASE IDENTIFY THE AMOUNTS CAPITALIZED OVER THE TERM OF THE
      COLLABORATION AGREEMENT RELATED TO THE ACQUISITION OF RIGHTS TO
      SUBSEQUENTLY DEVELOPED TECHNOLOGIES AS OF EACH FISCAL YEAR PRESENTED AND
      INTERIM PERIOD AS OF NOVEMBER 30, 2004.

           RESPONSE. As stated in the response to Comment number 4 above, the
      subsequently developed technologies are accounted for as intangible assets
      under the guidance of SFAS 2, paragraph 11(c), because the acquired
      technologies have alternative future uses in various research and
      development projects that Monsanto is pursuing. The costs of the
      subsequently developed technologies are dependent on the satisfactory
      completion of the deliverables, which are subject to established quantity
      and quality specifications, whereas the costs of the joint research
      program are tied to the performance of contract services as defined in
      SFAS 2, paragraph 11(d). If additional technologies received over the term
      of the arrangement do not meet established specifications, Monsanto is not
      contractually required to purchase them.

<PAGE>

Monsanto Company
April 8, 2005
Page 4

           In valuing the intangible assets, the contract price was used because
      the contract price was deemed to approximate the fair value of the assets.
      Since the contract prices specific to the subsequently developed
      technologies were negotiated on an arms-length basis in a current
      transaction between willing parties, the fair value of the consideration
      given approximates the fair value of the assets acquired. The
      internally-developed discounted cash flow valuation method was used as a
      check of that fair value assumption and to ensure that the intangible
      assets were not recorded at amounts in excess of their discounted cash
      flow value.

           Deliverables continue to be received over the five-year term of the
      collaboration agreement. As of each period presented and the interim
      period as of November 30, 2004, the following amounts were capitalized
      related to the subsequently developed technologies:

      As of:
      November 30, 2004    $18 million
      August 31, 2004      $18 million
      August 31, 2003      $7 million
      December 31, 2002    $ --

      NOTE 25. EQUITY AFFILIATES, PAGE 114
      ------------------------------------

6.    WE HAVE REVIEWED YOUR RESPONSE TO PRIOR COMMENT 19, NOTING YOU PERFORM
      RESEARCH AND DEVELOPMENT ACTIVITIES FUNDED BY RENESSEN LLC. PLEASE TELL US
      HOW YOU CONSIDERED THE GUIDANCE OF SFAS 68 IN DETERMINING HOW TO ACCOUNT
      FOR THESE ONGOING ARRANGEMENTS AND IN CONCLUDING THE RECOGNITION OF AN
      OBLIGATION AND FURTHER DISCLOSURE UNDER PARAGRAPH 14 ARE NOT REQUIRED.

           RESPONSE. As indicated in our previous response, the Renessen LLC
      (Renessen) joint venture (JV) is a 50-50 owned and funded JV between
      Monsanto and Cargill, Incorporated (Cargill). Under paragraph 5 of SFAS
      No. 68, RESEARCH AND DEVELOPMENT ARRANGEMENTS (SFAS 68), an obligation
      should be recognized if an entity is required to repay any of the funds
      provided by other parties for research and development (R&D) services
      regardless of the outcome of the research. Monsanto determined that
      recognition of an obligation for the research costs funded by Cargill to
      Renessen was not required. The JV agreement between Monsanto and Renessen
      does not obligate Monsanto to repay Cargill for its share of the past or
      future funding of Renessen, nor is there any implied obligation that it
      will do so. The JV has been in existence since September 1998. Since its
      inception, neither Monsanto nor its former parent company, Pharmacia
      Corporation, has reimbursed Cargill for any of its funding to Renessen,
      nor does Monsanto have any intention or obligation to do so in the future.

           Renessen was formed by Monsanto and Cargill to develop and
      commercialize enhanced grain products in the processing and animal feed
      markets, and to increase

<PAGE>

Monsanto Company
April 8, 2005
Page 5

     returns on those products by greater participation in the value chain. The
     JV combines Monsanto's seed assets and technology capabilities with
     Cargill's global grain processing, marketing and risk management
     infrastructure. As a result of the joint efforts of both parties and
     Renessen, the JV has launched its first product. Monsanto and Cargill each
     have a 50 percent interest in the Renessen JV, have committed to make equal
     contributions to fund its business operations and have equal representation
     on a governance board that manages Renessen. The factors discussed above
     (the terms of the JV agreement, Renessen's management structure, equal
     responsibility of both parties to fund its operations) as well as the fact
     that Cargill is not a related party demonstrate that the financial risk and
     reward associated with the funding of the research is shared equally by
     both parties, and neither party to the JV is obligated to reimburse the
     other. Based on the factors discussed above, Monsanto concluded that an
     obligation under paragraphs 5 through 8 of SFAS 68 does not exist.

          To more fully respond to the disclosure requirements under paragraph
     14, on a prospective basis, Monsanto will modify Note X -- Equity
     Affiliates -- in the report on Form 10-K for the year ended August 31,
     2005, to include a general description of the key terms and purpose of the
     JV. This will include the following new disclosure:

     "In September 1998, the former Monsanto Company entered into an agreement
     (as amended from time to time, the Renessen Agreement) to form the
     Renessen LLC joint venture (Renessen) with Cargill, Incorporated
     (Cargill). The agreement was assigned to Monsanto in connection with its
     spinoff from Pharmacia Corporation. The joint venture combines Monsanto's
     seed assets and technology capabilities with Cargill's global grain
     processing, marketing and risk management infrastructure to develop and
     commercialize enhanced grain products in the processing and animal feed
     markets, and to increase returns on those products by greater
     participation in the value chain. Monsanto and Cargill each have a 50
     percent interest in Renessen. A governance board on which Monsanto and
     Cargill each have equal representation manages Renessen. Monsanto and
     Cargill have committed to make equal contributions to fund the Renessen
     business plan that is approved by the governance board annually. The
     Renessen agreement grants Renessen a worldwide, fully paid-up,
     non-exclusive, non-royalty-bearing right and license to Monsanto's and
     Cargill's respective patents and other intellectual property needed for
     Renessen to pursue the approved business plan. Monsanto and Cargill
     receive rights to use intellectual property developed by Renessen in other
     specified areas. Pursuant to the Renessen Agreement, Monsanto performs the
     majority of Renessen's upstream research and development activities."

     NOTE 26. ADVERTISING COSTS, PAGE 114
     ------------------------------------

7.   WE HAVE REVIEWED THE PROPOSED DISCLOSURE PROVIDED IN RESPONSE TO PRIOR
     COMMENT 20.  HOWEVER, WE NOTE YOUR PROPOSED DISCLOSURE DOES NOT ADDRESS
     THE TIMING OF RECOGNITION IN THE INCOME STATEMENT OF AMOUNTS DUE FROM
     SCOTTS OVER THE LIFE OF THE CONTRACT ARRANGEMENT.  IN ADDITION, THE
     TERMS OF THE CONTRACT AND THE RESPONSIBILITIES OF EACH PARTY UNDER THE
     CONTRACTUAL ARRANGEMENT REMAIN UNCLEAR.  PLEASE EXPAND YOUR PROPOSED
     DISCLOSURE TO ADDRESS THE SIGNIFICANT TERMS OF THE AGREEMENT AND YOUR

<PAGE>

Monsanto Company
April 8, 2005
Page 6

      ACCOUNTING FOR THE AMOUNTS RECOGNIZED IN THE FINANCIAL STATEMENTS
      RELATED TO THIS AGREEMENT.

           RESPONSE. On a prospective basis, Monsanto will modify Note X --
      Selling, General and Administrative Expenses in the report on Form 10-K
      for the year ended August 31, 2005, to