1. The Future of the Seed Business
Matthew Mouw
Sr. Marketing Manager
Pioneer Hi-Bred, International Inc.
DuPont Agriculture & Nutrition
Thank you. It’s a pleasure to be here today.
I’m going to talk to you today about the great news in agriculture. This is an exciting time… Demand is growing, technology is better than ever, the adoption of biotechnology is incredible, the future is bright. Agriculture is a great business to be in.
I’ll also talk about our Ag and Nutrition growth platform and how Crop Protection and biotechnology are complimentary tools that will help meet the demands of a growing world population in a very attractive and growing food and ag industry.

2. Key Economic Factors Shaping Agriculture
Population growth
Rising incomes in developing countries
Increased demand for higher value foods
Yield growth
Tighter supply and demand relationships
North America is more dependent on changes in the global ag sector
Brazil and China are major sources of uncertainty in world markets for many commodities
Biotechnology
Population continues to grow globally.
Rising incomes in developing countries will fuel increases in the demand for more higher value foods.
Yield growth is the key to improve farmers’ incomes while satisfying the increasing global demand.
Because of the tighter supply and demand relationships, weather events or other crop declines will ripple through the sector with higher prices, possible rationing and more volatility.
North America is more dependent on changes in the global ag sector.
Brazil & China are major sources of uncertainty in world markets for many commodities.

3. Population and Income Growthß
Total (Million People)
Percent Annual Change à
Real GDP
Per Capita
Total (Thousand 1990 US$)
Total (Trillion 1990 US$)
Fast income growth is taking place in countries that have high population & lower total income. These economic factors lead to more demand for agricultural products.
Incomes are rapidly growing in countries like India, China, Brazil and Argentina that have high population and have had lower total income historically. These economic shifts are going to increase demand for higher protein diets.
These numbers are current. The left column is the total and the right column is the change year over year. The last year that’s included is the change from 2004 to (It does not include projections of 2006 and the change from 2005 to 2006 projections.)
This next slide shows…
Source Information: Pioneer – Global Market Economics, PWAF

4. Income and Meat Consumption
Per Capita Income and Meat Consumption
In general, countries
with higher levels
of per capita income,
have higher levels
of per capita meat consumption
Japan
With Fish
This shows per capita meat consumption of countries in relation to their per capita income. This chart does not take into account fish consumption. Otherwise, Japan would be up where their income level would indicate.
Source Information: USDA & GlobalInsight

5. Meat Consumption Increases with Income Growth
Billion Pounds
Brazil
EU-25
Russia
Ukraine
China 44 22 66 88
110
132
154
More meat is consumed in China than any other country
Total meat consumption in the U.S. is expected to grow slightly faster than population, resulting in a small rise in per capita meat consumption
As experienced in , animal disease outbreaks cause major disruptions in meat markets
BSE (“Mad Cow”)
Avian Influenza
Million Metric Tons
More meat is consumed in China than in any other country. And their demand is growing at a faster rate than the U.S., Brazil or the countries that make up the E.U. It should be noted that there are some hiccups along the way. Anytime we have an animal disease outbreak, we see a temporary disruption in meat markets.
This increased demand will utilize all, and more, of the increased global yields because of the amount of grain that will be needed to feed the livestock that will satisfy the growth in meat consumption. US
Source: USDA-PS&D

6. Biofuels: Putting the Market in Context
US Liquid Transportation Fuels
140 billion gallons of gasoline use on US roads
37.1 billion gallons of diesel used on highways
11.7 gallons of diesel used off-road (farmers use 3.2 billion gallons)
Current Ethanol production: 4.0 billion gallons (7.5 Renewable Fuel Standard by 2012)
Current estimated US biodiesel capacity: 100 million gallons per year
A bag of Pioneer Seed……
Produces ~ 1,200 gals of fuel ethanol
Makes 12,000 gals of E10 gasoline

7. Ethanol: A major driver in new grain flow patterns
# Bushels (mby) 1,797.78
# Acres 11,985,185
# Units 4,438,957
Current MMGY 3962
Potential MMGY 1019
Current % of 05/06 corn production consumed:
Iowa: 23%
Nebraska: 21%
Minnesota: 18%
South Dakota: 40%
26% of US corn use by 2015

8. China and Brazil Changing the Global Soybean Market
Global soybean production increased from 137 MMT to 217 MMT from 1994 to 2005
The U.S., Brazil and Argentina have led the production increases
Commodity prices have not fallen due to the increase in production, as China has had to import more to meet their needs
Brazilian surplus has been exported to the world market offsetting the increasing demand in China
The U.S. (exporter) and the EU-25 (importer) have been relatively stable in the world soybean trade in the last decade
There’s a lot of talk about the success and growth of Brazil’s soybean market at the expense of U.S. growers. I’d like to spend some time talking about why it isn’t a question of which country will be successful. And why there’s enough demand for both countries to grow their yield and export markets.
China’s demand for soy continues to grow, but their domestic supply cannot keep pace. Demand is growing at a pace that will more than account for the stocks produced by Brazil – and then some. And this is just one country.
U.S. Exports are relatively flat. In other words, Brazil’s export market is not growing at the expense of U.S. growers.
Source Information: Pioneer – Global Market Economics, PWAF

9. Crop Demand Growth in Last Decade
+12%
The growth rate of world population over the last ten years
+25%
The growth rate of pork consumption over the last ten years
+29%
The growth rate of chicken consumption over the last ten years
+23%
The growth rate of world corn consumption over the last decade
+39%
The growth rate of world soybean consumption over the last decade
+4%
The growth rate of world crop area harvested
There has been a population increase and increased demand for pork, chicken, corn, and soybeans. We have achieved this growth with an increase of only 4 percent in crop area. This has been achieved through increased productivity.
Productivity will be essential and drive decisions for farmers. The role of all input suppliers is to help customers increase productivity. At the same time, we all need to focus on productivity improvements in our own businesses.
Source: Pioneer Global Marketing - MREADS

10. Growth in Total Grain Production
Crop yields need to continue to increase to keep pace with increasing incomes, population and demand for meat
If yields don’t keep pace, more area will be pulled into production
Global corn area increased 4.8% since 1980; production increased 45.0% in that same time
More than 130 million “virtual acres” have been created since 1980
World Grain Consumption:
The world demand for corn is continuing to expand as incomes and population expand.
With increasing incomes and population and the resulting increase in demand for meat, crop yields will need to continue to increase.
If yields do not increase at the current forecasted rate, more area will be pulled into production.
Corn area in the world was 324 million acres in 1980 and is now 340 million acres (4.8% increase). Production increased from 16 to 24 billion bushels over that time (45.0%).
In other words, 130 million “virtual acres” acres were created since 1980.
Source Information: USDA & GlobalInsight

11. Biotechnology Acreage Increasing
4 Major Crops
I believe we are witnessing one of the greatest technology changes in the history of agriculture and this milestone is verification that farmers around the world recognize the significant value of biotechnology and have adopted its use at an amazing pace. Few technologies, not even the introduction hybrid corn in 1926 by Henry Wallace, have had the rapid acceptance and growth rate that biotech crops have enjoyed.
21 countries are growing biotech crops and developing countries are adopting at the same rate as developed countries.

12. Ag Biotechnology is Delivering Across the Board
Improved Food Quality and Taste
Improved Feed Quality
Offer Agronomic Traits
Stress Reduction, Yield Increase
Impact
Commercial
2nd Generation Pest and Weed Control
Multiple Pest/Weed Control Traits
1st Generation Pest and Weed Control
Crop Protection
1994
2004
2014
After 10 years of 1st generation pest control we’ve really only scratched the surface of the capability of this technology. We are now poised to deliver 2nd generation products as well as food and feed quality products.
Will are also making strides to develop products that may contain 5-6 individual stacked traits.
Food
Sales
Input
Providers
Grain
Processors
Food
Mfg.
Growers

13. Positioned to Capture Value
: Solid top line and bottom line growth
: Pipeline delivers expanded market, value and growth
Food
Feed
Bio-fuels
Bio-materials
Value Capture
Pioneer: $2.8B Revenue
Solae: $1.1B Revenue
Crop Protection: $2.3B Revenue
Input Providers
Growers
Grain Processors
End User Mfg.
Market Insight
Consumers

14. IndustrySelect® – Linking Seed to Need
More than 100 end-use account projects
and $100 million in Pioneer sales
2006 IndustrySelect Products by Category
Strong pipeline of transgenic trait solutions for all food, feed and fuel targets
Improved Animal Feed
Specific feed hybrids for faster weight gain
Targets: increased nutrient density and availability, oil modification, balanced amino acids and improved digestion
$2 billion opportunity per year
Improved Food
Optimizing taste and health benefits of soybeans
High performance corn grain characteristics to meet/exceed processor specifications
Increased Ethanol Production
Processors realize 2-4% ethanol yield gain
Industry Select is our Pioneer downstream value added corn seeds business.
These hybrids have demonstrated end use performance advantage in target end uses, specifically – ethanol, animal feed, food and starch
We started this business focus 2 yrs ago and this year sales broke $100mm and our share at target end users is >50% so we’re making progress.
Very important here is the base we are building that we will drive biotech output traits through in coming years.
Matching seed with needs across value chain
Industry-leading products for starch, ethanol, livestock feed, cereals and snack food
More than 100 end-use account projects and programs
More than $100 million in Pioneer sales tracked through these end-use programs
Strong foundation for products in the pipeline

15. Bio-Based Economy Value Chain
Fuels
Chemicals
Materials
Biomass
Feedstock
Growth markets
New products
Oil
Chemistry
Metabolic
Engineering

16. Aggressive R&D Strategy
Elite Genetics
Most extensive elite genetics pedigrees
Biotechnology
Proprietary traits and Genomic tools
Chemistry
Complimentary and high value solutions + +
Rich, Balanced Pipeline
Providing game changing solutions for the entire food and energy value chain
DuPont is uniquely position to take advantage of this combination of leading technologies
So we are using this data – 75 years of genetics, and the latest biotech genomics tools that have really become available in the last 3 years to understand the native gene drivers of performance. The real key for us has been the addition of mathematicians, bioinformatics experts and computational biologists to develop the best algorithm technology to revolutionize breeding.
So nobody could do this 3 years ago, and only we can do this today because of our 75 years of seed and performance data.
This is a key value driver and differentiator for our platform going forward.
Technology Foundation for Growth

17. 2005 Rich Crop Genetics Pipeline
Anthracnose Stalk Rot Resistance
Fungal Disease Resistance
Drought Tolerance I
Glyphosate Resistance
Corn Rootworm Resistance II
Herculex RW
Herculex RW + RR2
Herculex XTRA
Herculex XTRA + RR2
YGCB + YGRW + RR
YGCB + YGRW + RR2
Nitrogen Use Efficiency
Increased Yield I
Increased Yield II
Increased Ethanol Production I
Increased Ethanol Production II
Improved Feed I
Improved Feed II
Seed Production Technology
Asian Soybean Rust Resistance
Glyphosate + SU Resistance I
Glyphosate + SU Resistance II
Cyst Nematode Resistance
High Oleic Acid Oil
Omega-3 Oil
Drought Tolerance II
Glyphosate + SU Resistance
Drought Tolerance III
Corn Borer Resistance II
Herculex® I
Increased Ethanol Production III
Improved Feed III
Improved Processing
Nutrium Low Linolenic Oil
Corn
Soybeans
High Oleic + High Stearic Acid Oil
Phase 1 Proof of Concept
Phase 2 Early Development
Phase 3 Advanced Development
Phase 4 Pre-Launch
Discovery Gene/Trait Identification
Launch
Farmer
Processor
Consumer
Enabling Technology
Target Markets

18. 2006 Rich Crop Genetics Pipeline
Phase 1 Proof of Concept
Phase 2 Early Development
Phase 3 Advanced Development
Phase 4 Pre-Launch
Discovery Gene/Trait Identification
Launch
Farmer
Processor
Consumer
Enabling Technology
Target Markets
Corn
Soybeans
Anthracnose Stalk Rot Resistance
Fungal Disease Resistance
Drought Tolerance
Corn Rootworm Resistance II
Nitrogen Use Efficiency
Increased Yield I
Increased Yield II
Increased Ethanol Production II
Improved Feed II
Seed Production Technology
Asian Soybean Rust Resistance
Glyphosate + SU Resistance I
Glyphosate + SU Resistance II
Cyst Nematode Resistance
Improved Feed I
High Oleic Acid Oil
Omega-3 Oil
Glyphosate + SU Resistance
Corn Borer Resistance II
Increased Ethanol Production III
Improved Feed III
Corn Rootworm Resistance III
Corn Borer Resistance III
Insect Resistance
Glyphosate + SU Resistant Cotton
Insect Resistant Rice
Nematode Resistant Cotton
Glyphosate Resistant Cotton
Insect Resistant Cotton
Glyphosate Resistant Canola
Other Crops
High Oleic + High Stearic Acid Oil

19. Questions?