<PAGE>


                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549
          =================================================================

                                      FORM 10-K
          =================================================================
          (Mark One)

             X    Annual report pursuant to Section 13 or 15(d) of the
           ----   Securities Exchange Act of 1934

                  For the fiscal year ended August 31, 1998 or

           ----   Transition report pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act 1934

                  For the transition period from --- to ---             

          =================================================================

                           Commission file number :  0-17005

                              DEKALB GENETICS CORPORATION
              (Exact name of registrant as specified in its charter)

                        Delaware                         36-3586793
             ---------------------------------      --------------------
               (State or other jurisdiction           (I.R.S. Employer
             of incorporation or organization)       Identification No.)

          3100 Sycamore Road, DeKalb, Illinois  60115        815-758-3461
          -----------------------------------------------------------------
               --
          (Address of principal executive offices)          (Registrant's
                                                           telephone
                 number,
                                                         including area
                 code)

          Securities registered pursuant to Section 12(b) of the Act:


                                                  Name of each exchange
             Title of Class                        on which registered
             --------------                       ----------------------

          Class B Common Stock, no par value      New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

          Class A Common Stock, no par value

          Indicate by check mark whether the registrant (1) has filed all
          reports required to be filed by Section 13 or 15(d) of the
          Securities Exchange Act of 1934 during the preceding 12 months (or
          for such shorter period that the registrant was required to file
          such reports) and (2) has been subject to such filing requirements
          for the past 90 days.


          Yes:   x     No:




          Indicate by check mark if disclosure of delinquent filers
          pursuant to Item 405 of Regulation S-K is not contained herein,
          and will not be contained, to the best of registrant's knowledge,
          in definitive proxy or information statements incorporated by
          reference in Part III of this Form 10-K or any amendment to this
          Form 10-K.------


          The aggregate market value of all Common Stock held by non-
          affiliates was $2,841,176,994 based upon the closing price on the
          New York Stock Exchange on October 31, 1998.  (The officers and
          directors of the registrant are considered affiliates for
          purposes of this calculation.)

          As of October 31, 1998, 4,525,324 shares of the registrant's
          Class A Common Stock and 30,115,467 shares of the registrant's
          Class B Common Stock were outstanding.

          =================================================================


          <PAGE>
          Any forward looking statements, oral or written, are subject to
          several risks and uncertainties that could cause actual results
          to differ from those in the forward looking statements.  Among
          these factors are the Company's relative product performance and
          competitive market position, weather conditions, commodity
          prices, trade policies, market conditions, and results of pending
          litigation.

                                       PART I

          ITEM 1.  BUSINESS


          (a)  DEKALB Genetics Corporation (`DEKALB' or the `Company') is
            engaged in the development of products of major importance to
            two segments of modern agriculture--seed (corn, soybeans,
            sorghum, alfalfa and sunflower) and hybrid swine breeding
            stock.  DEKALB operates two business segments, one through the
            seed division of the Company (`DEKALB Seed') and one through
            its wholly-owned subsidiary, DEKALB Swine Breeders, Inc.
            (`DEKALB Swine').

            DEKALB conducts major research and development programs on
            those genetically determined traits which are of primary
            importance to the producer's profitability.  The Company
            develops primary or inbred lines through a process of
            observation, evaluation and selection for further breeding of
            those plants or swine which exhibit improved performance in
            certain traits.  These primary or inbred lines, when mated or
            crossed to other primary or inbred lines, will pass on to
            their progeny the improved performance in those traits for
            which the primary or inbred lines were selected.
            Additionally, a fundamental genetic principle--called
            heterosis, or hybrid vigor--is utilized.  Heterosis occurs
            when the progeny of genetically dissimilar parents have
            certain performance characteristics which are superior to
            those of either parent.

            DEKALB uses these principles of genetic selection and
            heterosis to provide products for the modern day agricultural
            industry.  The Company also develops production and management
            techniques to complement the performance potential which
            resides in the genetic composition of its products.

            As part of its research and development, DEKALB uses
            biotechnology to improve hybrid performance.  For example,
            using gene cloning and transformation techniques in the seed
            business, researchers are able to incorporate genes from
            various sources to create new, value-added traits such as
            herbicide resistance, insect resistance, and improved
            nutritional quality.  Further, DNA marker techniques enable
            researchers to correlate field performance with genetic makeup
            thereby giving them an improved ability to breed for desired
            product characteristics.

            DEKALB is a Delaware corporation which was organized on June
            15, 1988.  It succeeded from the genetics businesses of DEKALB
            Corporation which was originally founded in 1917.  On May 8,
            1998, the Company entered into an agreement and plan of merger<PAGE>


            (the `Merger Agreement') with Monsanto Company (`Monsanto')
            and Corn Acquisition Corporation, a wholy-owned subsidiary of
            Monsanto (`the Purchaser'), pursuant to which, among other
            things, Monsanto and the Purchaser have commenced a tender
            offer (the `Offer') by the Purchaser to purchase all
            outstanding shares of Class A and Class B Common Stock of the
            Company (collectively, the `Shares'), at a purchase price of
            $100.00 per Share, net to the seller in cash, without interest
            thereon (the `Offer Price'), upon the terms and subject to the
            conditions set forth in the Offer to Purchase dated May 15,
            1998, as amended, and in the related Letter of Transmittal,
            copies of which have been previously mailed to stockholders of
            the Company and filed by Monsanto and the Purchaser with the
            Securities and Exchange Commission (the `Commission').  The
            Merger Agreement further provides that following the
            consummation of the Offer and the satisfaction or waiver of
            certain conditions, the Purchaser will be merged (the
            `Merger') with and into the Company, with the Company
            continuing as the surviving corporation.  As of the effective
            time of the Merger, each issued and outstanding Share (other
            than Shares owned by the Company, Monsanto, the Purchaser or
            their respective subsidiaries, which Shares will be cancelled,
            and other than Shares, if any, held by stockholders who are
            entitled to and who properly exercise appraisal rights under
            Delaware law), will, by virtue of the Merger and without any
            action by the holder thereof, be converted into the right to
            receive from the surviving corporation in cash the price per
            Share paid in the Offer.  Pursuant to the Merger Agreement,
            Monsanto and the Purchaser commenced the Offer on May 15,
            1998.  The Offer is currently scheduled to expire at 5:00
            p.m., eastern standard time, on Monday, November 30, 1998,
            unless Monsanto extends it.

          (b)  Industry Segment and Geographic Area Information is included
               in Part II, Item 8, Footnotes R and N of the financial
               statements.<PAGE>


          <PAGE>
          (c)  The following narrative describes the businesses of each
               segment and other general matters of the Company.

          SEED


          DEKALB Seed, headquartered in DeKalb, Illinois, engages in the
          research and development of hybrid corn, varietal soybean, hybrid
          sorghum, hybrid sorghum-sudangrass and hybrid sunflower seed.
          The Company, directly or through its affiliates, contracts with
          growers to produce the seeds of such plants and markets them
          under the DEKALB brand.  It also markets varietal alfalfa and
          other forage mixtures.

          RESEARCH AND DEVELOPMENT.  Crop producers are very conscious of
          product performance and respond to new, improved products.  As a
          research-based company, DEKALB commits significant resources
          (approximately 16 percent of DEKALB Seed's consolidated worldwide
          revenues in fiscal year 1998) to the research and development of
          improved products.  Total worldwide research and development
          expenditures by DEKALB Seed were $70.3 million, $50.2 million and
          $40.9 million for fiscal years 1998, 1997 and 1996, respectively.

          DEKALB Seed operates an integrated, worldwide research and
          development effort, conducted at 62 research locations and over
          600 testing sites around the world, with 43 research locations
          and 322 test sites in the United States and Canada.  Worldwide,
          it has 46 corn breeding programs, 12 sorghum breeding programs,
          seven soybean breeding programs, and four sunflower breeding
          programs.  Throughout the world new hybrids and varieties are
          evaluated annually, and in the United States and Canada alone
          there are over one million performance test plots.  DEKALB Seed`s
          primary biotechnology research facility is located in Mystic,
          Connecticut and includes laboratories, greenhouses and a general
          office.  Biotechnology research expenditures represented
          approximately 25% of total seed research and development spending
          for fiscal year 1998.

          PRODUCTS.  In fiscal year 1998, sales of hybrid corn seed
          represented approximately 73 percent of DEKALB Seed's
          consolidated worldwide revenues.  Corn is the primary feed grain
          grown in the United States and has a seed market value of
          approximately $1.7 billion in the United States and $4.5
          billion worldwide, the largest of any agricultural seed.  Corn is
          planted under a wide variety of conditions which affect its
          growth and yield, including the length of the growing season
          (which is primarily determined by latitude and altitude), water
          availability, soil, climate and insect and disease challenges.
          To respond to this variety of conditions, DEKALB Seed has
          developed high yielding corn plants with different relative
          characteristics in terms of maturity (the time from planting to
          harvest), dry down (the time it takes for corn to dry to harvest
          standards), grain quality, standability (the strength of roots
          and stalks), insect, disease and herbicide resistance, plant and
          ear height and tolerance to drought and other stresses.

          Soybean acreage in the United States is third behind corn and
          wheat acreage, and in fiscal year 1998 the sale of soybean seed
          represented approximately 15 percent of DEKALB Seed's


          consolidated worldwide revenues.  DEKALB Seed has developed high-
          yielding soybean varieties with characteristics differing on the
          basis of maturity, tolerance to disease, seedling emergence,
          herbicide resistance, standability of the plant, and resistance
          to shattering (the premature opening of the bean pod).

          DEKALB Seed produces both grain and forage types of hybrid
          sorghum seed.  In fiscal year 1998, sales of hybrid sorghum seed
          represented approximately six percent of DEKALB Seed's
          consolidated worldwide revenues.  The grain sorghum product line
          is planted by farmers to produce a high-quality feed grain,
          approaching the value of corn.  The DEKALB Seed research effort
          continues to focus on developing hybrids which possess
          consistently high yields, resistance to lodging and greenbug
          attacks and drought tolerance, because more than 80 percent of
          the crop is grown under semi-arid conditions.

          DEKALB Seed is able to serve the requirements of several
          sunflower seed markets through development of a range of hybrids.
          These hybrids exhibit high yield, high oil content, a range of
          maturities, standability and disease resistance.  Currently,
          sunflower seeds are marketed primarily in the United States,
          Argentina, France, Spain, South Africa, and China.  Sunflower
          seed sales represented approximately four percent of DEKALB
          Seed's consolidated worldwide revenues in 1998.


          <PAGE>

          Virtually all corn and sorghum seed planted in the United States
          and practically all sunflower seed planted world-wide are
          hybrids.  Because the seeds (grain) produced by a hybrid do not
          have the same genetic composition as the seed planted, customers
          purchase nearly all of their corn, sorghum and sunflower seed
          each year so as not to lose the full benefits of genetic
          selection and heterosis.  If customers hold back corn, sorghum or
          most sunflower seed from their crop and plant it the next year,
          yield and other positive attributes will be dramatically reduced.

          Soybeans, on the other hand, are not hybrids.  Customers
          frequently retain and use a part of their crop as seed in the
          year following harvest.  Thus, there is a reduced market as well
          as lower profit margin potential for commercial soybean seed.
          The Plant Variety Protection Act, a law governing the use of
          proprietary soybean varieties, limits the quantity of seed a
          grower may retain and should help future prospects for capturing
          the value of soybean research improvements.

          DEKALB Seed also produces and sells SUDAX -Registered Trademark-
          brand sorghum-sudangrass and sells alfalfa.  SUDAX -Registered
          Trademark- brand is a hybrid cross of sorghum and sudangrass,
          producing a plant suitable for pasturing animals or multiple
          cuttings for forage or hay.  Alfalfa is used as animal feed,
          primarily for dairy and feeder cattle. Alfalfa is a perennial, as
          it will re-emerge for many seasons without additional seeding.

          Seed production is subject to the risk of the environment.  The
          parental inbred lines which are used in production are more
          sensitive to adverse conditions than are commercial hybrids grown
          by producers.  Weather is the biggest variable.  Wet weather at
          planting time, lack of moisture during the growing season, hot
          weather at pollination time and frost before the crop is mature
          can all adversely affect DEKALB Seed's supply and unit costs.
          For these reasons, DEKALB Seed has its production facilities
          spread geographically and frequently utilizes irrigation to
          minimize some of these risks.

          MARKETING.  In the United States, DEKALB Seed markets seed from
          coast to coast, through a large network of about 7,000
          independent farmer-dealers, distributors and farm stores who
          resell to producers.

          There are approximately 300 companies engaged in the production
          and marketing of agricultural seed, resulting in intense
          competition.  DEKALB Seed estimates that the top two -- Pioneer
          Hi-Bred International, Inc. of Des Moines, Iowa and DEKALB Seed -
          - accounted for over 54 percent of 1998 United States seed corn
          sales, and that the next six companies have a combined market
          share of over 26 percent.  DEKALB Seed is the second largest
          seller of corn seed with a market share of over 12 percent and is
          one of the largest sellers of soybean and sorghum seed in the
          United States.  Competition for sales of seed to producers
          involves factors such as relative product performance, price,
          marketing and promotional programs, technical and informational
          support, customer relationships and the effectiveness of the
          sales force.  DEKALB Seed management believes it competes
          favorably with respect to all these factors.



          INTERNATIONAL OPERATIONS.  The international seed business has
          risks and competition similar to the United States seed business,
          plus the added risks of different political environments and
          currency fluctuations.  From its initial activities in 1959, the
          international seed business of DEKALB Seed has expanded to most
          areas of the world where corn, sorghum, soybean, alfalfa and
          sunflower are grown.

          DEKALB Seed, directly or indirectly, operates wholly-owned
          subsidiaries in Argentina, Canada, Italy, and has a 49%-owned
          affiliate in Mexico.  In addition, foreign-based companies in
          major agricultural markets have been licensed to produce and
          market DEKALB seed.  Thus, local production and marketing is
          carried out in more than 20 countries worldwide.  The agreements
          with these foreign affiliates provide for the development,
          production and sale of hybrids and varieties adapted to meet
          local market preferences.  International revenues through
          consolidated subsidiaries totaled nearly $120 million in 1998.
          In addition, it is estimated that DEKALB brand seed sales through
          non-consolidated foreign affiliates and licensees totaled over
          $130 million.

          SEASONALITY.  Production, sale and distribution of seed follows a
          seasonal pattern.  In North America, DEKALB Seed normally grows
          its seed supply in the summer, and it is harvested, conditioned
          and bagged in the months of September through January.  The
          dealers' sales effort takes place in the fall, and generally
          about three-fourths of customer seed orders are placed by
          December 1st.  Deliveries of seed corn occur principally in the
          late winter and spring, during the Company's second and third
          fiscal quarters.  Sales revenue is recognized upon shipment of
          seed.  Returns of unsold seed occur, in most cases, during the
          fourth fiscal quarter.  At the time sales are recorded, DEKALB
          Seed provides for estimated returns based upon historical
          experience and current weather conditions.


          <PAGE>

          During the past three years, approximately 55 percent and 45
          percent of North American seed revenues were recorded in the
          second and third fiscal quarters, respectively.  Cash collections
          also follow a seasonal pattern, as the majority of customers
          remit cash in advance of their first due date in June in order to
          earn discounts for early payment.  Approximately two-thirds of
          DEKALB Seed's cash outflow in North America occurs in the months
          of December through April and includes payments to independent
          farmers who contracted to produce DEKALB Seed products during the
          prior summer.

          The demand for seed reflects the demand for the crop's end use
          including animal feed, industrial use and food consumption.  The
          cyclical nature of the business creates uncertainty from year to
          year concerning the size of the market for seed.  An inaccurate
          estimate of seed needs can result in an undersupply of seed or an
          oversupply of seed (which may create the need to write off
          inventories).

          PATENTS AND APPLICATIONS.  Patents, trademarks, United States
          Plant Variety Protection Act Certificates, foreign plant
          registrations and licenses to use genetic material and
          intellectual property are growing in importance, generally, to
          the industry and to the business of DEKALB Seed.  While no single
          patent is currently of material importance to the Company's seed
          business, the fact that a significant number of patents have been
          issued to the Company in the area of biotechnology is considered
          to be an important factor relating to the future ability to
          commercialize genetically engineered products and to enable the
          Company to enter into royalty generating license agreements with
          third parties.

          DEKALB Seed's policy is to fully protect its inventions,
          discoveries and intellectual property.  (See Item 3 - Legal
          Proceedings.)  DEKALB Seed has incurred and expects to continue
          to incur legal expenses associated with the ongoing enforcement
          of its patents.

          SWINE

          DEKALB Swine, headquartered in DeKalb, Illinois, engages in the
          research and development of hybrid swine breeding stock and
          markets such hybrid breeding swine and related management
          services to hog producers in both domestic and international
          markets.

          RESEARCH AND DEVELOPMENT.  Through genetic research and
          development, male and female lines of swine have been developed
          which are unique to DEKALB Swine.  These DEKALB Swine lines
          undergo continual genetic improvement through research which
          includes an ongoing process of observation, testing, statistical
          analysis and selection for further breeding of only those animals
          exhibiting improvement in economically important traits.

          DEKALB Swine's research and development expenditures were $6.8
          million, $7.1 million and $6.7 million for fiscal years 1998,
          1997 and 1996, respectively.


          PRODUCTS AND PROGRAMS.  Domestically, DEKALB Swine generates
          breeding stock sales and license revenues from five principal
          programs (Specific Cross -Registered Trademark- Program, hybrid
          boar rotation, Custom Genetics -Registered Trademark- Program,
          crossing farms, and artificial insemination centers) through
          which it markets hybrid breeding swine and semen.
          Internationally, DEKALB Swine licenses or sells primary lines to
          third parties for the production of breeding stock in foreign
          countries under trademark licenses and technical agreements.

          DEKALB Swine's secondary product is market hogs, which are a by-
          product of the production of breeding animals and represent about
          50 percent of total revenues.  Because DEKALB Swine produces a
          consistent and high quality product, this market hog by-product
          is generally sold by DEKALB Swine at a premium above major
          slaughter market averages.

          MARKETING.  In the United States, DEKALB Swine sells breeding
          stock to approximately 1,250 customers who fall into two broad
          categories.  First, larger hog producers represent a major market
          for DEKALB Swine's products.  As the number of hog producers has
          declined by more than 50 percent over the past ten years to
          approximately 139,000 hog farms, these larger producers represent
          a growing share of hog production, and an increasing percentage
          of DEKALB Swine's breeding stock sales.  Larger producers
          purchase boars or boar semen and either purchase gilts, or in
          many cases, operate an in-house `crossing farm' and pay DEKALB
          Swine fees by licensing DEKALB great-grandparent or grandparent
          lines to produce their own grandparent or parent gilts.


          <PAGE>
          Second, DEKALB Swine's smaller customers primarily purchase
          DEKALB Swine boars and generally retain gilts from their own
          herds.

          Internationally, DEKALB Swine currently licenses or sells swine
          breeding stock to distributors in five foreign countries.  Those
          distributors sell offspring to several hundred local customers.

          COMPETITION.  In the United States, DEKALB Swine competes with
          national and regional producers of hybrid swine breeding stock
          and thousands of producers of purebred stock.  DEKALB Swine
          believes that it is one of the largest producers of hybrid
          breeding stock in the United States.

          The demand for swine breeding stock depends upon the supply of
          hogs to be produced, which is determined by the profitability of
          hog production, which, in turn, depends upon the supply and
          demand for pork and pork products, as well as the cost of
          production.  The demand for DEKALB Swine breeding stock depends
          upon customer acceptance and the ability to offer products and
          services which are superior to the competition.

          Breeding stock prices are influenced by the quality of the
          breeding stock, by competition from other major hybrid and
          purebred producers, and by market hog prices.  On average, hybrid
          breeding stock sells at a higher price than purebred swine.

          In addition to price, competition for sales to hog producers
          involves factors such as reproductive performance of the parent
          hybrid boars and gilts, performance and quality of their market
          hog offspring, technical knowledge and competence of the sales
          force, service programs, and post-sale support.  DEKALB Swine
          management believes it competes favorably with respect to all
          these factors.

          The swine industry is a cyclical business that is heavily
          influenced by producer profitability.  Historically, hog
          production has followed a three to five year expansion phase
          followed by a similar contraction phase.  At the peak of the
          expansion phase, market hog prices are generally at a low and
          unprofitable level.  As hog production decreases, prices normally
          begin to rise until expansion again begins to occur.

          GENERAL

          On August 31, 1998, DEKALB had approximately 2,000 employees.

          Working capital requirements in the seed business arise out of
          the need to carry newly produced inventories of seed (principally
          corn), and payables to growers associated with growing that seed,
          until receipts from the selling season are collected several
          months later.  DEKALB Seed, therefore, has significant working
          capital requirements from January 1 to July 1 of each year
          because approximately two-thirds of DEKALB Seed's cash flow for
          expenses occurs in the months of December through April, although
          final receipts are not received until June.  It is anticipated
          that such requirements will be met through cash generated from
          operations and lines of credit for general corporate purposes.


          DEKALB has available various credit facilities which include a
          revolving line of credit. The revolving credit agreement provides
          for a $50 million line of credit for general corporate purposes,
          and has a required step-down to $20 million for one day during
          each year.

          DEKALB Swine's production and sales patterns are such that
          working capital needs are relatively constant.

          The operations of DEKALB are subject to various state and federal
          environmental and safety laws, rules and regulations.  Certain of
          the facilities of DEKALB are also subject to state and federal
          environmental protection laws, rules and regulations.  Management
          of DEKALB believes that the Company is in compliance, in all
          material respects, with applicable environmental and safety laws,
          rules and regulations, and that such compliance has not had any
          material adverse effect on its operations or financial condition.

          ITEM 2.  PROPERTIES

          In both its seed and swine businesses, DEKALB property consists
          primarily of foundation genetic material and the property,
          buildings and related equipment for research, production,
          distribution and marketing.


          <PAGE>

          DEKALB Seed headquarters personnel occupy a 73,000 square foot
          office building and DEKALB Swine headquarters personnel occupy a
          11,000 square foot office building, both of which are located in
          DeKalb, Illinois and are owned by the Company.  In July 1996, an
          additional 52,000 square foot facility near the headquarters in
          DeKalb was purchased and is currently fully occupied.  DEKALB
          began a renovation of the larger facility in April, 1997 and
          broke ground on a new 25,000 square foot training center adjacent
          to the larger facility.  DEKALB expects renovation and
          construction to be completed by Summer 1999.

          DEKALB Seed owns or leases 42 facilities in the United States and
          20 outside of the United States at which research functions are
          performed.  Seed production and foundation locations in the
          United States total 28 with nine outside the United States.  In
          addition, two seed warehouses are located in the United States.
          DEKALB Seed owns or leases 11 sales offices, all in the United
          States, and owns a biotechnology research facility in Mystic,
          Connecticut.

          DEKALB Swine owns 19 research, foundation and production farms
          and 9 genetic evaluation stations.  Fourteen of the farms, as
          well as an office and modern feed mill, are located in Seward and
          Meade Counties, Kansas and nearby Beaver and Texas Counties,
          Oklahoma.  Three farms are located near the corporate
          headquarters in DeKalb, Illinois with two additional farms near
          Lubbock, Texas.

          DEKALB believes its facilities are adequate to serve its needs
          and that if additional facilities are required as the business
          expands, DEKALB will be able to acquire or lease such facilities
          on reasonable terms.


          ITEM 3.  LEGAL PROCEEDINGS


          The Company and its subsidiaries are defendants in various
          legal actions arising in the course of business activities.
          Four of such cases involve patent related matters.  On
          October 1, 1996 Plant Genetics Systems, a Belgian company
          that is a wholly-owned subsidiary of Hoechst Schering AgrEvo
          Gmbh, filed a lawsuit against the Company in the federal
          district court of Connecticut in which they allege that the
          Company is infringing U.S. Patent No. 5,561,236.  The patent
          purports to be directed to certain genetically engineered
          plants and cells that exhibit resistance to certain
          herbicides.  On October 22, 1996, two subsidiaries of
          Mycogen Corporation filed a lawsuit against the Company and
          two other defendants in the Federal District Court of
          Wilmington, Delaware in which the allege that the defendants
          are infringing U.S. Patents 5,567,600 and 5,567,862.  These
          patents purport to be directed to certain processes that
          produce plants that exhibit certain insect resistance.  On
          February 3, 1998 a federal jury in Wilmington, Delaware
          ruled that neither the company nor either of the other
          defendants infringed these two patents.    The parties are
          in the process of filing post-trial motions.  On January 21,


          1997, Novartis Seeds, Inc. filed a lawsuit against the
          Company in the federal district court of Delaware in which
          they allege that the company is infringing U.S. Patent No.
          5,595,733.  On November 9, 1998, a federal jury in
          Wilmington, Delaware ruled that the Company did not infringe
          the patent and that the patent was not valid.  That patent
          purports to be directed to certain methods for protecting
          certain plants against pest damage.  On October 30, 1997
          Rhone-Poulenc Agrochimie S.A. (`RPA') filed a lawsuit in the
          federal district court in the Middle district of North
          Carolina in which they allege that the Company
          misappropriated certain RPA technology, is in breach of
          certain agreements, is in violation of certain antitrust
          laws and is infringing upon certain patents of RPA.  All of
          these claims relate to corn that is resistant to glyphosate
          herbicide.  On October 28, 1998, Pioneer Hi-Bred
          International, Inc. filed a lawsuit in the federal district
          court in the Southern District of Iowa claiming that the
          Company misappropriated certain Pioneer corn germplasm.  In
          the opinion of management, these actions will not result in
          a material adverse effect on the Company's consolidated
          operations or financial position.

          The Company is also the plaintiff in various legal actions.
          The most significant of these actions have been filed by the
          Company in federal district court in the Northern District
          of Illinois and allege infringement of one or up to five of
          the Company's biotechnology related patents.  The patents
          involved are U.S. patent no. 5,484,956 covering fertile,
          transgenic corn plants expressing genes encoding Bacillus
          thuringiensis (Bt) insecticidal proteins, U.S. patent no.
          5,489,520 covering the microprojectile method for producing
          fertile, transgenic corn plants covering a bar or pat gene,
          as well as the production and breeding of progeny of  such
          plants, U.S. patent nos. 5,538,880 and 5,538,877 directed to
          methods of producing either herbicide-resistant or insect-
          resistant transgenic corn and U.S. patent no. 5,550,318
          directed to transgenic corn plants containing a bar or pat
          gene.  In each such case the Company has asked


          <PAGE>

          the Court to determine that infringement has occurred, to
          enjoin further infringement and to award unspecified
          compensatory and exemplary damages.  Lawsuits were initially
          filed on April 30, 1996 against Pioneer Hi-Bred
          International, Inc., Mycogen Corporation (and two of its
          subsidiaries) and Ciba-Geigy Corporation.  A similar lawsuit
          was filed against Northrup King Co. on June 10, 1996.  In
          addition, the Company sued Beck's Hybrids, Inc. and
          Countrymark Cooperative, Inc. on July 23, 1996 and filed
          against several AgrEvo entities on August 27, 1996.  All
          lawsuits related to patent No. 5,550,318 have been stayed
          pending resolution to an interference proceeding involving
          that patent at the U.S. Patent and Trademark Office.  There
          can be no assurance that the Company will prevail in any of
          the actions described in this paragraph.


          ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          No matters were submitted to the vote of security holders during
          the fourth quarter of fiscal 1998.

                                    PART II




          ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                   STOCKHOLDER MATTERS

          A.As of October 31, 1998 there were approximately 500 record
            holders of Class A Common Stock and approximately 1,300 record
            holders of Class B Common Stock.  On June 16, 1997, DEKALB's
            Class B Common Stock began trading on the New York Stock
            Exchange under the symbol DKB.  Previously Class B shares were
            traded on the NASDAQ/NMS under the trading symbol SEEDB.
            There is no established public trading market for Class A
            shares.

          <TABLE>
          <CAPTION>


          B.                              1st       2nd        3rd        4th
                                         Qtr.       Qtr.      Qtr.       Qtr.
              Common Stock Data*

              <S>                      <C>        <C>        <C>       <C>
              1998
                Dividends per share    $  0.035   $ 0.035    $ 0.035   $ 0.035

              Market price range **
                 - Low                 $ 33.63    $25.25     $66.63    86.63
                 - High                $ 47.13    $69.88     $95.88    $95.50

              1997
                Dividends per share    $  0.035   $ 0.035    $ 0.035   $ 0.035

              Market price range **

                 - Low                 $ 16.63    $ 18.63    $25.50    $35.94
                 - High                $ 21.25    $33.82     $35.57    $42.38

              *  All share numbers and prices have been adjusted to reflect the
                 two-for-one split of the Common Stock to holders of record
                 July 25, 1997.

              ** Market price range reflects closing daily prices.


        </TABLE>

        <TABLE>


          ITEM 6 - SELECTED FINANCIAL DATA                 Years Ended August 31 -
                                              (Dollars in millions, except per share amounts)
                                              _________________________________________________
                                           
                                           



                                          1998        1997       1996        1995       1994
                                         _______     _______    _______     _______    _______
          <S>                            <C>         <C>        <C>         <C>        <C>
          OPERATIONS DATA




             Revenues:

              North American Seed        $ 332.3     $295.2      $259.8     $ 199.9     $183.8
              International Seed           120.8       99.6        80.6       72.1        63.7
              Swine                         49.1       56.6        47.1       47.4        52.7
                                         ________    ________    ________   ________    ________

              Total Operating Revenues   $ 502.2     $451.4      $387.5     $319.4      $300.2

             Pre-Tax Earnings (Loss):
               North American Seed       $   6.9     $ 38.3      $ 30.9     $ 22.3      $ 14.7
               International Seed           32.8       20.0        10.0        7.6         8.0
               Swine                        (5.0)       1.5         0.2       (0.9)        5.7
               Interest, corporate and
                other                      (19.5)     (13.4)      (13.0)     (13.9)      (13.2)
                                         ________    ________    ________   ________    ________

             Earnings before income
               taxes anddiscontinued
               operations                   15.2       46.4        28.1       15.1        15.2
             Income tax provision            4.9       17.6        11.1        5.6         4.6
                                         ________    ________    ________   ________    ________

             Earnings before
             discontinued operations     $  10.3     $ 28.8      $ 17.0     $  9.5      $ 10.6
             Discontinued operations           -          -           -        1.2           -

             ___________________________________________________________________________________


             Net earnings                $  10.3     $ 28.8      $ 17.0     $ 10.7      $ 10.6
             ===================================================================================

          PER SHARE DATA (5)
             Basic earnings per share(1) $   0.30    $  0.84     $  0.52    $  0.34     $  0.34
             Diluted earnings per share  $   0.28    $  0.81     $  0.51    $  0.34     $  0.34
               (2)
             Dividends per share         $   0.14    $  0.14     $  0.137   $  0.133    $  0.133
             ___________________________________________________________________________________

          FINANCIAL DATA
             Return on average equity        5.1%      15.8%       11.5%       8.6%        9.0%
             Current ratio                   1.27       1.70        2.18       1.85        1.75
             Working capital             $  64.1     $ 93.0      $102.7     $ 80.4      $ 68.9
             Net property, plant and     $ 237.8     $166.1      $119.5     $ 99.8      $ 95.7
             equipment
             Total Assets                $ 590.8     $449.6      $363.3     $323.0      $315.2
             Long-term debt              $ 112.9     $ 90.0      $ 85.0     $ 85.0      $ 85.0
             Total debt to                  54.4%      38.8%       33.5%      50.3%       51.8%
             capitalization
             Shareholder's equity (3)    $ 211.4     $196.1      $168.6     $126.3      $121.3
             Book value per common share $   6.10    $  5.71     $  4.94    $  4.06     $  3.93
             _________________________________________________________________________________

          GENERAL
             Avg. shares outstanding for
             basic earnings per share    34,577      34,251      32,516     30,981      30,849
             (4)
             Avg. shares outstanding for
             diluted earnings per share  36,365      35,744      33,554     31,542      31,317
             (4)
             Number of employees          2,058       2,037       1,882      1,828       1,927
             _________________________________________________________________________________

             (1) Basic earnings per common share for fiscal 1994-1998 are calculated by
             dividing net earnings by the average number of common shares outstanding during
             those fiscal years.
             (2) Diluted earnings per common share for fiscal 1994-1998 are calculated by
             dividing net earnings by the average number of common and common equivalents
             (stock options) shares outstanding during those fiscal years.
             (3) Gains and losses resulting from translation (except in foreign countries
             experiencing hyperinflation) are reflected as an adjustment to shareholders'
             equity.
             (4) Average shares outstanding are in thousands.
             (5) Per share data was adjusted to reflect the two-for-one and three-for-one
             stock splits to holders of record on July 25, 1997 and May 10, 1996,
             respectively.
           </TABLE>

           <PAGE>
           ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS
           _______________________________________________________________
                                               

           RESULTS OF OPERATIONS

           SUMMARY
           -------


           Net earnings for fiscal 1998 were $10.3 million ($0.28 per
           share) compared with $28.8 million ($0.81 per share) in fiscal
           1997.  In North America, seed segment earnings decreased from
           $38.3 million in 1997 to $6.9 million in 1998.  Improved sales
           volumes for both corn and soybeans and growing revenues from
           third-party royalties were more than offset by increased corn
           production costs, expanded sample seed usage and higher
           operating expenses. In addition, Swine segment earnings
           declined $6.5 million from fiscal 1997 to fiscal 1998,
           primarily as a result of lower market hog prices.
           International seed segment earnings improved 64 percent from
           fiscal 1997 to fiscal 1998 due to significantly higher sales
           volume and margin increases in Argentina and improved equity
           earnings from Mexico.

           During fiscal 1998, revenues increased 11 percent from $451.4
           million in fiscal 1997 to $502.2 million.  In North America,
           revenues increased 13 percent due to higher corn volume and
           specialty trait premiums, reflecting an improved product mix.
           Higher soybean volumes and growing royalties from third
           parties also contributed to the revenue improvement. In
           Argentina, average corn selling prices increased due to a
           significant portion of sales volume shifting to higher price
           categories.  In addition, fiscal 1998 Argentine corn volume
           increased over 50 percent from the previous year, driving the
           21 percent International segment revenue improvement. Swine
           segment revenues decreased by 13 percent largely due to lower
           market hog prices.

           Net earnings for fiscal 1997 were $28.8 million ($0.81 per
           share) compared with $17.0 million ($0.51 per share) in fiscal
           1996.  All three business segments reported higher
           profitability compared with the prior year.  In North America,
           improved corn unit margins combined with higher soybean volume
           resulted in a 24 percent improvement in earnings.
           International seed segment earnings doubled from fiscal 1996 to
           fiscal 1997 largely due to sales volume and margin increases in
           Argentina and Mexico. In addition, Swine segment earnings
           improved as a result of an increase in breeding stock sales
           combined with higher market hog prices.


           During fiscal 1997, revenues rose 16 percent ($451.4 million
           versus $387.5 million) compared with fiscal 1996. The increase
           combined a 24% increase in International revenues with a 14%
           improvement in North American revenues as corn average selling
           prices in North America and Argentina increased primarily due
           to a significant portion of sales volume shifting to higher
           price categories contributing to improved unit margins.  (North
           American soybean revenues increased 21% driven largely by a 15%
           increase in sales volume.)  Swine segment revenues increased as
           a result of increased breeding stock sales accompanied by
           higher market hog prices.


           FOURTH QUARTER

           The $14.5 million ($0.40 per share) net loss in the fourth
           quarter of fiscal 1998 exceeded the prior year fourth quarter
           loss of $2.7 million ($0.07 per share) by $11.8 million.  North
           American seed profitability decreased $12.3 million as final
           results of promotional seed programs were provided by field
           sales representatives.  In addition, swine profitability
           declined $2.7 million from net earnings of $1.4 million in the
           fourth quarter of fiscal 1997 to a loss of $1.3 million in the
           same period of fiscal 1998 primarily due to lower market hog
           prices.

           The net loss in the fourth quarter of fiscal 1997 of $2.7
           million ($0.07 per share) was higher when compared with the
           prior year fourth quarter loss of $1.2 million ($0.03 per
           share); however, the sources differed from year to year.   The
           fiscal 1997 loss was largely due to corporate and
           administrative expenses coupled with higher than expected corn
           seed returns more than offsetting late season soybean sales.
           The fiscal 1996 loss primarily reflected corporate and
           administrative expenses.  Losses are typical for DEKALB in the
           fourth quarter because that period primarily reflects corporate
           and interest expenses and adjustments related to estimated full
           year seed returns and expenses recorded in the previous nine
           months.


           <PAGE>
           <TABLE>
           <CAPTION>

           Full Year         Industry Segment Revenues and Pre-Tax
           Earnings
                                            (in millions)
           _______________________________________________________________
           __
                                 Years ended August 31<PAGE>


           <S>                     <C>           <C>          <C>
           Revenues                     1998         1997         1996
           --------                -----------   ----------   ---------
           North American seed     $    332.3    $    295.2   $  259.8
           International seed           120.8          99.6       80.6
           Swine                         49.1          56.6        47.1
                                   __________    __________   ________
                                   $    502.2    $    451.4    $  387.5
                                   ==========    ==========   ========


           Pre-tax Earnings
           ----------------
           North American seed     $      6.9    $     38.3   $   30.9
           International seed            32.8          20.0       10.0
           Swine                         (5.0)          1.5        0.2
           General Corporate            (10.0)         (8.5)      (6.9)
           Expenses
           Interest Expense, Net         (9.5)         (4.9)      (6.1)
                                   ___________   __________   ________
                                   $     15.2    $     46.4   $  $28.1
                                   ==========    ==========   ========


           </TABLE>

           North American Seed


           Segment earnings for North American seed decreased 82 percent
           from $38.3 million in fiscal 1997 to $6.9 million in fiscal
           1998.  Revenues increased 13 percent over fiscal 1997 as
           volumes for corn and soybeans rose 17 and 14 percent,
           respectively, and third-party royalties more than doubled
           compared to a year ago.  The revenue improvement was more than
           offset by higher corn production costs combined with
           significant increases in research spending, litigation fees,
           and selling and distribution expenses.  High cost production in
           the southern hemisphere was expanded to accommodate               
           introductory levels of Roundup Ready corn and Bt corn products
           (Roundup Ready  is a trademark of Monsanto Company).
           Additional revenue growth was constrained by seed sampling          O
           programs directed to the launch of 300,000 Roundup Ready  corn
           and 400,000 Bt corn units.  Management believes excellent
           performance from these hybrids in fiscal 1998 leaves the
           Company well positioned for future sales.

           Corn revenues increased over ten percent in fiscal 1998
           compared to fiscal 1997 due to volume improvements accompanied
           by significantly higher revenues from specialty trait premiums.
           However, primarily due to the expanded use of seed sampling
           programs, the average corn selling price decreased by nearly 12
           percent.  DEKALB market share momentum has continued as the
           Company added a point and a half share in fiscal 1998.  Over
           the past five years DEKALB gained more than four share points
           in North America.

           Revenues from third-party royalties rose in fiscal 1998 with
           rising demand for DEKALB specialty trait products.  Royalties
           which depend on sales by third parties were accrued in the
           second and third quarters consistent with the historical
           pattern of industry sales.

           Soybean revenues in fiscal 1998 increased nearly 14 percent
           compared to fiscal 1997 on a sales volume increase of 14%.  The
           contribution of the soybean product line to segment earnings
           has continued to climb over the past four years due to
           increases in acreage, planting rate and market share.  In
           fiscal 1998, the demand for DEKALB varieties continued with
           more than 40 percent of sales volume attributed to Roundup Ready
           soybeans.  However,  sorghum volume declined 13 percent
           from fiscal 1997 as dry weather in the western plains and the
           panhandle, combined with economic conditions favoring corn and
           soybeans, resulted in reduced planted acreage.

           Segment earnings for North American seed increased 24 percent
           from $30.9 million in fiscal 1996 to $38.3 million in fiscal
           1997 as revenues increased 14 percent over fiscal 1996.  Higher
           selling prices for both corn and soybeans, together with
           increased soybean volume and third-party royalties were major
           factors for the increase.
           
           Corn revenues in fiscal 1997 were over nine percent higher as
           average corn selling prices increased over seven percent due to
           favorable mix and price increases.  Corn unit margins increased
           over $5.00 per unit as a result of


           <PAGE>

           the higher net selling prices and lower production costs.  In
           addition, third party royalties were an increasing source of
           revenues in fiscal 1997 as DEKALB specialty trait products made
           their entrance into the North American corn market.

           Compared with fiscal 1996, fiscal 1997 soybean revenues
           increased 21 percent on a sales volume increase of nearly 15%.
           Demand was strong for DEKALB varieties and was enhanced with   
           the introduction and acceptance of Roundup Ready  soybeans.

           In fiscal 1997, sorghum revenues and sales volume decreased
           slightly from the 1996 levels when sorghum planted acreage
           expanded 40 percent over fiscal 1995.  In fiscal 1996, farmers
           shifted to sorghum as a replacement for failed winter wheat
           crops in combination with significantly better market prices,
           which made sorghum production more profitable.


           INTERNATIONAL SEED

           International seed segment earnings increased 65 percent to
           $32.8 million in fiscal 1998 from $20.0 million in fiscal 1997.
           Significant corn volume improvement in Argentina was the main
           reason for the earnings growth.

           The improvement in segment earnings in fiscal 1998 was
           primarily driven by a 50 percent corn volume increase in
           Argentina, resulting in a 15 percentage point increase in the
           Argentine market.  DEKALB now has approximately 48 percent of
           the Argentine corn seed market.  Increased demand for single-
           cross corn hybrids generated a volume mix shift to higher
           priced products and
           contributed to a $12.8 million profitability improvement in
           Argentina.  Earnings in Mexico and Argentina were up 26 and 19
           percent, respectively.

           International seed segment earnings rose $10.0 million during
           fiscal 1997 to $20.0 million.  Operations in Latin America were
           primarily responsible for the significant earnings improvements
           along with a return to profitability in Italy.  Argentine
           earnings improved $6.1 million from the previous year.  Higher
           corn margins were driven largely by a 40% increase in revenues,
           as a result of increased sales volume of 17 percent accompanied
           by higher average selling prices.  Higher corn and sorghum
           sales volumes generated improved earnings in Mexico ($4.3
           million in fiscal 1997 compared with $1.5 million in fiscal
           1996).

           WORLD WIDE SEED
           ---------------

           Patents, trademarks, United States Plant Variety Protection Act
           Certificates, foreign plant registrations and licenses to use
           genetic material and intellectual property are growing in
           importance, to the seed industry in general and to the business<PAGE>


           of DEKALB Seed.  While no single patent is currently of
           material importance to the Company's seed business, the fact
           that a significant number of patents have been issued to the
           Company in the area of biotechnology is considered to be an
           important factor relating to the future ability to
           commercialize genetically engineered products and to enable the
           Company to enter into royalty generating license agreements
           with third parties.

           DEKALB Seed's policy is to fully protect its inventions,
           discoveries and intellectual property.  (See Item 3 - Legal
           Proceedings.)  DEKALB Seed has incurred and expects to continue
           to incur legal expenses associated with the ongoing enforcement
           of its patents.

           Seed segment earnings will continue to be affected by a variety
           of factors in both domestic and international markets including
           the Company's relative product performance and competitive
           market position, weather conditions, commodity prices and trade
           policies.


           SWINE
           -----

           Swine segment earnings decreased during fiscal 1998 from $1.5
           million in 1997 to a loss of $5.0 million in fiscal 1998.
           Revenues fell by 13 percent from $56.6 million in fiscal 1997
           to $49.1 million in fiscal 1998 primarily due to lower market
           hog prices and decreased royalty revenues.  Top market hog
           prices decreased 25 percent from $57 per hundred weight in
           fiscal 1997 to $43 per hundred weight in fiscal 1998.
           Increased demand for male genetics combined with lower
           production costs were more than offset by the effect of lower
           market hog prices.   Production cost savings were possible due
           to lower grain prices and efficient management practices.<PAGE>


           <PAGE>

           Swine segment earnings increased during fiscal 1997 to $1.5
           million from $0.2 million in fiscal 1996, while revenues
           increased 20 percent from $47.1 million in fiscal 1996 to $56.6
           million in fiscal 1997. Strong demand for newly improved DEKALB
           swine genetics resulted in breeding stock revenues increasing
           18 percent on a 12 percent increase in volume.  In addition, a
           $16 per hundred weight improvement in top market hog prices led
           to an 18 percent increase in market revenues on a five percent
           increase in volume.

           GENERAL
           -------

           General corporate expenses decreased $1.0 million in fiscal
           1998 compared to fiscal 1997.  Employee benefit program
           expenses were lower after steadily rising during the previous
           three years.

           Net interest expense rose $5.1 million in fiscal 1998 as
           borrowing needs grew for capital expansion and higher
           production and operating expenses.   Fiscal 1997 net interest
           expense decreased $1.2 million from fiscal 1996 due to lower
           average corporate borrowing requirements.

           The effective tax rate decreased to 32% in fiscal 1998 from 38%
           in fiscal 1997.  The decrease is primarily related to the tax
           effects of changes in the overall earnings mix and
           international operations of the Company.  In fiscal 1997, the
           effective tax rate decreased to 38% from 39.5% in fiscal 1996,
           primarily due to the effect of international operations and
           research credits.

           On January 31, 1996, DEKALB entered into a series of agreements
           with Monsanto, including an agreement which provides the
           framework for a long-term research and development
           collaboration with Monsanto in the field of agricultural
           biotechnology, particularly corn seed. DEKALB and Monsanto also
           entered into cross-licensing agreements covering insect-
           resistant and herbicide-tolerant corn products. The two
           companies will share the royalties received from third parties
           relating to the patents covered by such cross-licensing
           agreements.

           During the third quarter of fiscal 1996, DEKALB completed a
           sale of equity to Monsanto as part of an Investment Agreement.
           Monsanto purchased from DEKALB 0.5 million newly issued shares
           of DEKALB Class A (voting) Common Stock at a price per share of
           $10.83 and 2.8 million newly issued shares of Class B (non-
           voting) Common Stock at a price per share of $10.83.  As a
           result of the new stock issued to Monsanto, the total number of
           outstanding shares of Common Stock of the Company rose to over
           34.0 million from about 31.2 million.

           Monsanto also acquired 10.4 million shares of DEKALB's publicly
           traded Class B Common Stock in a separate cash tender offer at<PAGE>


           a price of $11.83 per share.  Upon completion of the tender
           offer, Monsanto held ten percent of the Class A voting shares
           and approximately 43 percent of the Class B non-voting shares.
           Additionally, DEKALB received $6.0 million, $3.0 million, and
           $4.0 million from Monsanto in fiscal 1998, 1997 and 1996,
           respectively.  Total payments over the term of the agreement
           are $18.2 million.

           The Company adopted Financial Accounting Standards Board
           Statement No. 121, `Accounting for the Impairment of Long Lived
           Assets and for Long Lived Assets to Be Disposed Of,' in fiscal
           1997.  The new accounting standard had no impact on the
           carrying value of the Company's long lived assets as of August
           31, 1997 and 1998.

           The Company also adopted Financial Accounting Standards Board
           Statement No. 123, `Accounting for Stock-Based Compensation' in
           fiscal 1997.  Complete disclosure is contained in footnote Q to
           the financial statements included under item 8.

           The Company adopted the Financial Accounting Standards Board
           issued Statement No. 128, `Earnings Per Share,' effective
           February 28, 1998.  Shares outstanding and per share amounts
           have been restated for prior years.

           In June 1997 the Financial Accounting Standards Board issued
           Statement No. 130, `Reporting Comprehensive Income,' which
           establishes standards for reporting of comprehensive income.
           This pronouncement requires that all items recognized as
           components of comprehensive income, as defined in the
           pronouncement, be reported in<PAGE>


           <PAGE>
           a financial statement that is displayed with the same
           prominence as other financial statements.  Comprehensive income
           included all changes in equity during a period except those
           resulting from investments by owners and distributions to
           owners.  The financial statement presentation required under
           Statement No. 130 is effective for all fiscal years beginning
           after December 15, 1997.  The Company had planned to adopt
           Statement No. 130 in fiscal 1998, but due to the pending sale
           of the Company, management decided to delay adoption.  As of
           August 31, 1998, the impact of adopting this pronouncement has
           not been determined, however; the Company expects it will be
           affected by it.

           In June 1997 the Financial Accounting Standards Board issued
           Statement No. 131, `Disclosures about Segments of an Enterprise
           and Related Information,' which amends the requirements for a
           public enterprise to report financial and descriptive
           information about its reportable operating segments.  Operating
           segments, as defined in the pronouncement, are components of an
           enterprise about which separate financial information is
           available that is evaluated regularly by the Company's
           managment in deciding how to allocate resources and in
           accessing performance. The financial information is required to
           be reported on the basis that is used internally for evaluating
           segment performance and deciding how to allocate resources to
           segments.  The disclosures required by Statement No. 131 are
           effective for all fiscal years beginning after December 15,
           1997.  The Company had planned to adopt Statement No. 131 in
           fiscal 1998, but due to the pending sale of the Company,
           management decided to delay adoption.  This pronouncement will
           have an affect on the Company's reporting in the subsequent
           periods. However, as of August 31, 1998, the impact of this
           pronouncement has not been determined.

           In July 1998 the Financial Accounting Standards Board issued
           Statement No. 133, `Accounting for Derivative Instruments and
           for Hedging Activities,' which replaces existing pronouncements
           and practices with a single, integrated accounting framework
           for derivatives and hedging activities.  The Company plans to
           adopt Statement No. 133 in fiscal 1999.  This pronouncement
           will have an affect on the Company's reporting in the
           subsequent periods. However, as of August 31, 1998, the impact
           of this pronouncement has not been determined.

           YEAR 2000
           ---------

           The Year 2000 issue stems from two-digit storage, leap year
           calculations, and special meaning dates that were written into
           software applications, installed in hardware or as microchips
           in various types of electronic  equipment.  Computer programs
           that do not recognize the proper date could generate erroneous
           data or cause systems to fail.

           The Company established a project team to develop and implement
           a plan to ensure that its systems are compliant with the<PAGE>


           requirements to process transactions in the Year 2000.  The
           Company's project plan includes awareness, inventory,
           assessment, remediation, testing and contingency planning.  To
           date, awareness, inventory and assessment activities are
           underway on a worldwide basis, including all business
           activities and locations.  This information will be used to
           identify the risk and issues, evaluate their significance and
           determine remediation, testing and contingency planning.

           Internal and external resources will be used as necessary to
           complete the project.  In addition to the Company's internal
           analysis, when practicable the Company is contacting key
           business partners to make certain that no interruption of
           activities will occur.

           Costs of addressing potential problems have not been material
           to date and, based on information known to date, are not
           currently expected to have a material adverse impact on
           DEKALB's financial position, results of operation or cash flow
           in future periods.   Accordingly, management plans to devote
           the resources it concludes are necessary to resolve all
           significant Year 2000 issues.<PAGE>


           <PAGE>
           FINANCIAL POSITION

           Management believes its operating cash flow and existing credit
           facilities are sufficient to cover normal and expected working
           capital needs, dividends, capital expenditures and debt
           maturities.

           Cash Flow
           ---------


           Net cash flow used by operations was $50.1 million in fiscal
           1998 compared to an inflow of cash of $3.5 million in fiscal
           1997.  Higher production costs resulting from a shift to winter
           production in the southern hemisphere combined with higher
           operating expenses were the main  reasons for the increased
           outflow.


           During fiscal 1997, increased inventories and receivables,
           caused by a larger seed corn production crop and higher sales,
           brought about a decrease of $66.7 million in cash provided by
           operations when compared to fiscal 1996.

           The Company continues to invest in seed production facilities.
           This resulted in cash outflows from investing activities to
           increase $30.9 million in fiscal 1998 when compared with fiscal
           1997.  Net cash flow used by investing activities reflected the
           continued upgrade and expansion of office facilities and seed
           production plants in the U.S. and Argentina.  These
           expenditures resulted in increased borrowings during fiscal
           1998 and 1997, while in fiscal 1996, cash from the sale of
           equity allowed the Company to reduce its short-term debt.


           CREDIT FACILITIES
           -----------------
           The Company has various credit facilities and available lines
           of credit with several commercial banks, both domestic and
           foreign.  Committed credit lines include a $50 million
           revolving credit facility and $15 million in credit facilities
           for a 364 day period.

           The revolving credit agreement provides credit for general
           corporate purposes and is committed through December 31, 2003,
           but may be extended annually for successive one year periods
           with the consent of the lending banks.  The line of credit
           requires a step-down to $20.0 million for any one day during
           each year.  The agreement contains various restrictions on the
           activities of the Company as to maintenance of tangible net
           worth, amount and type of indebtedness, and the acquisition or
           disposition of capital shares or assets of the Company and its
           subsidiaries.  At August 31, 1998, tangible net worth was
           approximately $172.5 million, which meets these covenant
           requirements.<PAGE>


           DEKALB also has numerous uncommitted short term credit
           facilities available and draws upon them periodically,
           including during the twelve months ended  August 31, 1998.


           CAPITAL EXPENDITURES
           --------------------
           The Company continues to upgrade and expand seed production
           plants and office facilities in the United States and
           Argentina.  Capital expenditures were $90.3 million in fiscal
           1998,  an increase of $30.9 million from the fiscal 1997
           spending level of $59.4 million.  During fiscal 1997, the
           expansion of seed production and research facilities escalated
           $28.7 million from the fiscal 1996 level of $30.7 million.  In
           fiscal 1999, the Company plans to continue significant capital
           expenditures for expansion and renovation of its various
           facilities.<PAGE>


           <PAGE>

           ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES
                     ABOUT MARKET RISK
           ---------------------------------------------------------------

             DERIVATIVES

             DEKALB has contractual commitments with seed growers for
             payments based on local market corn and soybean commodity
             prices.  To mitigate the impact of fluctuation in these
             prices on inventory costs, the Company hedges these payments
             by using Chicago Board of Trade corn and soybean futures
             contracts.  Growers not priced at the end of August are
             normally priced by March, at which time the related futures
             contracts are closed.  The Company estimates the timing of
             grower payment pricing to determine the futures maturities.
             In addition, the Company, from time to time, hedges its
             exposure to price fluctuations in grain used for swine feed.
             Gains or losses on these hedge positions are included as a
             component of the applicable year's inventory.  At August 31,
             1998 and 1997, the Company had corn and soybean futures
             contracts outstanding with a contract market value of $28.8
             million and $1.6 million, respectively.  Margin deposits for
             open futures and/or option contracts are recorded as other
             current assets.

             DEKALB sells market hogs, which are by-products from the
             production of breeding animals, to independent processing
             and packing firms at the premium to the major market
             averages.  The Company periodically hedges against the
             exposure of price fluctuations in these markets by using
             Chicago Mercantile Exchange hog futures contracts.  At
             August 31, 1998 the  Company had hog futures contracts
             outstanding with a contract market value of $0.1 million.
             At August 31, 1997, the Company had no hog futures contracts
             outstanding.

             As of August 31, 1998 the net unrecognized loss on open
             futures contracts was $5.0 million.  As of August 31, 1997
             the net unrecognized gain on open futures contracts was $0.1
             million.

             SENSITIVITY ANALYSIS

             For commodity derivitave instruments held, the Company
             utilizes a sensitivity analysis technique to evaluate the
             effect that changes in the market value of commodities will
             have on the Company's commodity derivative instruments.  The
             fair value of such positions is a summation of the fair
             values calculated for each commodity by valuing each net
             position at quoted futures prices at fiscal year-end.
             Market risk is estimated as the potential loss in fair value
             resulting from a hypothetical 10% adverse change in such
             prices.  At year-end, the potential change in fair value of
             commodity derivative instruments, assuming a 10% adverse
             change in the underlying commodity price, was $3.3 million.<PAGE>



             VALUE AT RISK

             These estimations are intended to measure the maximum amount
             the Company could lose from adverse market movements in
             interest rates and foreign exchange rates, given a specified
             confidence level, over a given period of time.  Loss is
             defined in the value at risk estimation as fair market value
             loss.  As a result, foreign exchange gains or losses that
             are charged directly to translation adjustments in common
             stockholder equity are included in this estimate.  The value
             at risk estimation utilizes historical interest rates and
             foreign exchange rates from the past year to estimate the
             volatility and correlation of these rates in the future.
             The model uses the variance-covariance statistical modeling
             technique and includes all interst rate sensitive debt and
             swaps, foreign exchange hedges and their corresponding
             underlying exposures.  The estimated value at risk amounts
             shown below represent the potential loss the Company could
             incur from adverse changes in either interest rates or
             foreign exchange rates for a one-day period.  These amounts
             are not significant compared with the equity, earnings or
             daily change in market capitalization of the Company.

                                    AMOUNTS        TIME      CONFIDENCE
             VALUE AT RISK       (dollars in     INTERVAL      LEVEL
               AMOUNT              millions)
             ---------------------------------------------------------
             Interest rates & FX     $0.1         1 day          95%

             The foreign exchange value at risk amount is principally
             driven by the large amount of foreign currency-denominated
             net assets the Company has deployed around the world,
             including production facilities, inventory and short-term
             net working capital.  These assets are translated to U.S.
             dollars at the current exchange rate.  The change in the
             value of the assets due to changing foreign exchange rates
             is included as part of translation adjustment in common
             stockholder's equity, and not part of income.  However, the
             foreign exchange value at risk amount includes the estimate
             of the loss on these assets.

             The amounts presented here from the value at risk model also
             disregard the possibility that interest rates and foreign
             exchange rates can move in the Company's favor.  The
             assumption within the value at risk model is that changes in
             interest rates and foreign exchange rates are adverse.  It
             is highly unlikely that the Company would experience
             continuous daily losses such as these over an extended
             period of time.  Rather, actual experience has demonstrated
             that gains on certain days are offset by losses on other
             days.<PAGE>


           <PAGE>
           ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
           ----------------------------------------------------

                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

           To the Shareholders and Board of Directors of DEKALB Genetics
           Corporation:

           We have audited the accompanying consolidated balance sheets of
           DEKALB Genetics Corporation (a Delaware corporation) and
           subsidiaries as of August 31, 1998 and 1997, and the related
           consolidated statements of operations, cash flows and
           shareholders' equity for each of the three years in the period
           ended August 31, 1998.  These financial statements are the
           responsibility of the Company's management.  Our responsibility
           is to express an opinion on these financial statements based on
           our audits.

           We conducted our audits in accordance with generally accepted
           auditing standards.  Those standards require that we plan and
           perform the audit to obtain reasonable assurance about whether
           the financial statements are free of material misstatement.  An
           audit includes examining, on a test basis, evidence supporting
           the amounts and disclosures in the financial statements.  An
           audit also includes assessing the accounting principles used
           and significant estimates made by management, as well as
           evaluating the overall financial statement presentation.  We
           believe that our audits provide a reasonable basis for our
           opinion.

           In our opinion, the consolidated financial statements referred
           to above present fairly, in all material respects, the
           financial position of DEKALB Genetics Corporation and
           subsidiaries as of August 31, 1998 and 1997, and the results of
           its operations and its cash flows for each of the three years
           in the period ended August 31, 1998 in conformity with
           generally accepted accounting principles.

           Our audits were made for the purpose of forming an opinion on
           the basic consolidated financial statements taken as a whole.
           The schedule listed in Item 14(a) (2) of this Form 10-K is
           presented for purposes of complying with the Securities and
           Exchange Commission's rules and is not part of the basic
           consolidated financial statements.  This schedule has been
           subjected to the auditing procedures applied in the audit of
           the basic consolidated financial statements and, in our
           opinion, fairly states in all material respects the financial
           data required to be set forth therein in relation to the basic
           consolidated financial statements taken as a whole.


           ARTHUR ANDERSEN LLP

           Chicago, Illinois
           October 2, 1998

          <TABLE>
          <CAPTION>


                                     DEKALB GENETICS CORPORATION
                                CONSOLIDATED STATEMENTS OF OPERATIONS
          __________________________________________________________________________________

          <S>                                <C>          <C>          <C>          <C>
          for the years ended August 31 -
          in millions except per share
          amounts                                           1998         1997         1996
          __________________________________________________________________________________

          Revenues                                        $502.2       $451.4       $387.5
          Cost of revenues                                 275.2        230.5        202.1
          __________________________________________________________________________________

            Gross Margin                                   227.0        220.9       $185.4

          Selling expense                                   96.3         83.1         73.9
          Research and development expense                  77.1         57.3         47.6
          General & administrative expense                  29.3         33.2         31.1
          __________________________________________________________________________________

                                                           202.7        173.6        152.6

            Operating Earnings                              24.3         47.3         32.8

          Interest expense, net                             (9.5)        (4.9)        (6.1)
          Other income, net                                  0.4          4.0          1.4
          __________________________________________________________________________________


          Earnings before income taxes                      15.2         46.4         28.1
          Income tax provision                               4.9         17.6         11.1

          NET EARNINGS                                    $ 10.3       $ 28.8       $ 17.0
          ==================================================================================



          BASIC EARNINGS PER SHARE                        $  0.30      $  0.84      $  0.52
          ==================================================================================

          DILUTED EARNINGS PER SHARE                      $  0.28      $  0.81      $  0.51
          ==================================================================================

          DIVIDENDS PER SHARE                             $  0.14      $  0.14      $  0.137
          ==================================================================================
          </TABLE>

              The accompanying notes are an integral part of the financial
                                       statements.<PAGE>
<PAGE>


          <TABLE>
          <CAPTION>

                                   DEKALB GENETICS CORPORATION
                                   CONSOLIDATED BALANCE SHEETS
          _____________________________________________________________________________

                          at August 31 - in millions                   1998       1997
         ______________________________________________________________________________
         <S>              <C>                                        <C>        <C>
         ASSETS           Current assets:
                           Cash and cash equivalents                 $    -     $   5.2
                           Receivables, net                             69.5       67.5
                           Inventories                                 184.5      139.1
                           Deferred income taxes                        14.6        6.9
                           Other current assets                         28.7        7.8
                          __________________________________________ ________   ________


                            Total current assets                     $ 297.3    $ 226.5
                          __________________________________________ ________   ________

                           Investments and advances                      7.5        7.2
                           Intangible assets, net                       38.9       40.3
                           Other assets                                  9.3        9.5
                           Property, plant and equipment, net          237.8      166.1
                          __________________________________________ ________   ________

                            Total Assets                             $ 590.8    $ 449.6
                          ========================================== ========   ========

         Liabilities &    Current liabilities:
         Shareholders'     Short-term debt                           $ 139.0    $  34.5
         Equity
                           Accounts payable, trade                       9.1       15.6
                           Other accounts payable                       35.8       37.3
                           Other current liabilities                    49.2       46.1
                          __________________________________________ ________   ________

                            Total current liabilities                $ 233.1    $ 133.5
                          __________________________________________ ________   ________

                          Deferred compensation and other credits       10.2        9.9
                          Deferred income taxes                         23.2       20.1
                          Long-term debt                               112.9       90.0
                          __________________________________________ ________   ________

                            Total long-term liabilities              $ 146.3    $ 120.0
                          __________________________________________ ________   ________

                          Commitments and contingent liabilities

                          Shareholders' equity:
                           Capital stock:
                           Common, Class A; no par value,
                             authorized 15,000,000 shares issued
                             4,552,994 for 1998 and 4,698,392 for<PAGE>





                             1997                                        0.5        0.5
                           Common, Class B; no par value, non-
                             voting, authorized 45,000,000 shares
                             issued 30,087,593 for 1998 and
                             30,105,987 for 1997                         3.0        3.0
                           Capital in excess of stated value           124.2      114.9
                           Retained earnings                            91.4       85.9
                           Cumulative translation adjustment            (6.1)      (5.7)
                          __________________________________________ ________   ________
                                                                     $ 213.0    $ 198.6

                           Less treasury stock, at cost:  287,182
                             and 443,206 shares of Class B in 1998
                             and 1997, respectively.                    (1.6)      (2.5)
                          __________________________________________ ________   ________

                           Total shareholders' equity                $ 211.4    $ 196.1<PAGE>





         ______________________________________________________________________________

                           Total Liabilities and Shareholders'       $ 590.8    $ 449.6
                             Equity<PAGE>


         ==============================================================

         The accompanying notes are an integral part of the financial statements.<PAGE>
<PAGE>

          </TABLE>

          <TABLE>
          <CAPTION>

                                       DEKALB GENETICS CORPORATION
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS

              _______________________________________________________________________________
                                                                    For the years ended
                                                                  August 31 - in millions
                                                             ________________________________

                                                               1998        1997        1996
              ____________________________________________    _______     _______    _______
              <S>                                            <C>         <C>         <C>

              CASH FLOWS FROM OPERATING ACTIVITIES
               Net earnings                                  $  10.3     $  28.8     $  17.0

               Adjustments to reconcile net income to net
                cash provided by operating activities:
                  Depreciation and amortization                 15.5        13.8        11.3
                  (Gain) on sale of fixed assets                 0.6        (0.6)       (0.2)
                  Provision for losses on accounts
                    receivable                                   0.8         2.8         1.2
                  Provision for deferred income taxes           (4.4)        6.0         1.8
                  Provision for inventory valuation              5.3        11.8         7.3
                  Equity (earnings) loss, net of dividends       0.8        (2.2)       (1.7)
                                                             ________    ________    ________
                                                                18.6        31.6        19.7

               Changes in assets and liabilities:
                  Receivables                                   (2.7)      (15.3)        1.9
                  Other current assets                         (28.7)       (2.2)       (1.1)
                  Inventories                                  (50.7)      (51.8)       (0.5)
                  Accounts payable                              (8.1)        5.3        25.2
                  Accrued expenses                               1.8         5.6         8.2
                  Current taxes payable                          1.3         3.2         1.8
                  Deferred income taxes                          7.4        (1.2)       (1.2)
                  Other assets and liabilities                   0.7        (0.5)       (0.8)
                                                             ________    ________    ________
                                                               (79.0)      (56.9)       33.5

              Net cash flow (used) provided by operating
              activities                                       (50.1)        3.5        70.2
              _______________________________________________________________________________

              CASH FLOWS FROM INVESTING ACTIVITIES
               Purchases of property, plant and equipment      (90.3)      (59.4)      (30.7)
               Proceeds from sale of property, plant and
                 equipment                                       2.7         1.9         0.4
               Acquisitions and investments                        -           -_       (3.2)
                                                             ________    ________    ________

              Net cash flow used by investing activities       (87.6)      (57.5)      (33.5)
              _______________________________________________________________________________

              CASH FLOWS FROM FINANCING ACTIVITIES<PAGE>





               Proceeds from short-term borrowings             104.6        34.4           -
               Proceeds from long-term borrowings               22.9         5.0           -
               Principal payments made on debt                     -           -       (42.8)
               Sale of equity                                    6.3         0.6        27.6
               Dividends paid                                   (4.8)       (4.8)       (4.3)
               Other capital transactions                        3.9         2.2         1.3
                                                             ________    ________    ________
                                                             _           _           _

              Net cash flow (used) provided by financing
                activities                                     132.9        37.4       (18.2)
              _______________________________________________________________________________

              Net effect of exchange rates on cash              (0.4)       (1.5)        1.8
                                                             ________    ________    ________

              Net increase (decrease) in cash and cash
                equivalents                                     (5.2)      (18.1)       20.3
               Cash and cash equivalents, at the beginning
                 of the year                                     5.2        23.3         3.0
                                                             ________    ________    ________

               Cash and cash equivalents, at the end of
                 the year                                    $   0.0     $   5.2     $  23.3
              ===============================================================================
              Note:  Cash paid during the year for:
               Income taxes                                  $   6.9     $   8.4     $   7.6
               Interest                                      $   7.5     $   7.3     $   6.9<PAGE>

              </TABLE>











g notes are an integral part of the financial statements.<PAGE>
<PAGE>



           <TABLE>
           <CAPTION>

                                             DEKALB GENETICS CORPORATION
                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
            ____________________________________________________________________________________________

           at August 31-in millions              1998                  1997                  1996
             except shares in thousands   ___________________   ___________________   ___________________
                                                                                               _
           <S>                           <C>         <C>       <C>        <C>        <C>         <C>
                                         --------   --------   --------   --------   --------   --------
                                          Dollars     Shares    Dollars     Shares    Dollars     Shares
                                         --------   --------   --------   --------   --------   --------
           Class A Common Stock

           Balance, beginning of year    $    0.5     4,698    $    0.2     2,404    $   0.1        773
             Exchange Class A for Class B    -         (269)       -         (185)       -          (99)
             Stock options exercised         -           60        -           87        -           32
             Employee 401(k) stock plan      -           64        -           32        -           14
             Sale of equity to Monsanto
              Company                        -            -        -            -        -           81
             Three-for-one stock split
              effected in the form of a
              200% stock dividend            -            -        -            -        0.1      1,603
             Restricted Stock                -            -        -           10        -            -
             Two-for-one stock split
              effected in the form of a
              100% stock dividend            -            -        0.3      2,350        -           -
                                         _______    _______    _______    _______    _______    _______
           Balance, end of year          $   0.5      4,553    $   0.5      4,698    $   0.2      2,404
           _____________________________________________________________________________________________

           Class B Common Stock

           Balance, beginning of year    $   3.0     30,106    $   1.5     14,868    $   0.4      4,485
             Exchange Class A for Class B    -          269        -          185        -           99
             Sale of equity to Monsanto      -            -        -           12        0.1        378
           Company
             Three-for-one stock split
           effected in the                   -            -        -            -        1.0      9,906
             form of a 200% stock
           dividend
             Two-for-one stock split
              effected in the form
              of a 100% stock dividend       -            -        1.5     15,041       -          -
           Balance, end of year          $   3.0     30,375    $   3.0     30,106    $   1.5      14,868
           _____________________________________________________________________________________________

           Capital in Excess of Stated
              Value

           Balance, beginning of year    $ 114.9               $ 109.7               $  80.9
             Sale of equity to Monsanto
              Company                        5.4                   0.6                  27.6
             Stock options exercised         0.4                   0.5                   0.6
             Non-qualified stock option<PAGE>





              tax benefit                    1.0                   2.3                   -
             Employee 401(k) stock plan      2.8                   1.5                   0.5
             Director Stock Option Plan      0.1                   0.3                   0.1
             Authorized share increase      (0.4)                  -                     -

           Balance, end of year          $ 124.2               $ 114.9               $  109.7
           _____________________________________________________________________________________________

           Balance, beginning of year    $  85.9               $  63.7               $  52.3
             Net Income                     10.3                  28.8                  17.0
             Cash dividends on common
              stock ($0.14  per share in
              1998, $0.14 per share in
              1997,  and $0.137 per share
              in 1996)                      (4.8)                 (4.8)                 (4.5)
             Three-for-one stock split
              effected in the form of a
              200% stock dividend            -                     -                    (1.1)
             Two-for-one stock split
              effected in the form
              of a 100% stock dividend       -                    (1.8)              -
           Balance, end of year          $  91.4               $  85.9               $  63.7
           _____________________________________________________________________________________________


           Cumulative Translation
              Adjustment

           Balance, beginning of year    $  (5.7)              $  (4.1)                 (5.0)
             Translation gain/(loss)        (0.4)                 (1.6)                  0.9
                                         ________              ________              ________
           Balance, end of year          $  (6.1)              $  (5.7)                 (4.1)
           _____________________________________________________________________________________________

           Treasury Stock

           Balance, beginning of year    $  (2.5)      (443)   $  (2.4)      (220)   $  (2.4)       (74)
             Stock options exercised         -            -                             (0.1)        (2)
             Employee 401(k) stock plan      -            -                              0.1          2
             Three-for-one stock split
              effected in the form of a
              200% stock dividend        -                -        -            -        -         (146)
             Two-for-one stock split
              effected in the form                        -
              of a 100% stock dividend   -                         -          (221)      -            -
             Treasury stock repurchase                            (0.1)        (2)
             Sale of equity to Monsanto      0.9        156        -            -
              Company
           Balance, end of year          $  (1.6)      (287)      (2.5)      (443)   $ (2.4)       (220)
           _____________________________________________________________________________________________

           Total shareholders' Equity    $ 211.4               $ 196.1               $ 168.6<PAGE>
           </TABLE>











================================================================================

he accompanying notes are an integral part of the financial statements.<PAGE>



        <PAGE>
                             DEKALB Genetics Corporation
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



        A.  ACCOUNTING POLICIES
        -----------------------

        PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
        include the accounts of the seed division (`DEKALB Seed') and DEKALB
        Swine Breeders, Inc. (`DEKALB Swine').  The accounts of the DEKALB
        subsidiary in Argentina are included on the basis of its May 31
        fiscal year, which more properly reflects the growing season in that
        country.  Transactions between this date and the Company's fiscal
        year-end are not considered material.

        The Company's investments in related companies (owned 50% or less),
        primarily in Mexico, are carried at cost plus equity in undistributed
        net earnings and losses since dates of acquisition.  Carrying values
        approximate the Company's interest in the net assets of these related
        companies.

        INTANGIBLE ASSETS - Intangible assets consist primarily of the cost
        of purchased businesses in excess of market value of net assets
        acquired (goodwill).  In accordance with company policy, DEKALB
        assesses recoverability and impairment of goodwill on an annual
        basis.  DEKALB amortizes goodwill on a straight-line method over 40
        years.

        PROPERTY, PLANT AND EQUIPMENT - It is the policy of DEKALB to
        capitalize expenditures for major renewals and betterments and to
        charge to operating expenses the cost of current maintenance and
        repairs.  Provisions for depreciation have been computed principally
        on the straight-line method, based on expected lives, for buildings
        and equipment.  Rates used for depreciation are determined separately
        for individual plants and locations and are based principally on the
        following expected lives:  buildings - 12.5 to 33.5 years; equipment
        - 4 to 12.5 years; other - 3 to 20 years; and leasehold improvements
        - term of lease or useful life, whichever is shorter.

        The cost and accumulated allowances for depreciation and amortization
        relating to assets retired or otherwise disposed of are eliminated
        from the respective accounts at the time of disposition.  The
        resulting gain or loss is included in `other income, net.'

        INCOME TAXES - In accordance with SFAS 109, the Company accounts for
        income taxes under the asset and liability method.  The asset and
        liability method is applied using enacted tax rates expected to apply
        when temporary differences between financial and tax reporting are
        realized.  The amount of income tax expense recognized for a period
        is the amount of income taxes currently payable or refundable, plus
        or minus the change in aggregate deferred tax assets and liabilities.
        The most significant of these differences are set forth in Note L.
        At August 31 of each year presented, United States income taxes were
        provided on undistributed earnings of non-U.S. subsidiaries.<PAGE>



        FOREIGN CURRENCY TRANSLATION - Effective in fiscal 1995, the Company
        no longer considered certain countries hyperinflationary for purposes
        of applying Statement of Financial Accounting Standards No. 52 (SFAS
        No. 52), `Foreign Currency Translation.'  Foreign-currency assets and
        liabilities are translated into their U.S. dollar equivalents based
        on rates of exchange prevailing at the end of the respective period.
        Translation adjustments resulting from translating foreign currency
        financial statements of consolidated subsidiaries into their U.S.
        dollar equivalents are reported separately and accumulated in a
        component of shareholders' equity.

        STATEMENT OF CASH FLOWS - DEKALB classifies highly liquid investments
        with original maturities of three months or less as cash and cash
        equivalents.

        CONCENTRATION OF CREDIT RISK - The Company's business activity is
        primarily with dealers and distributors located in the United States
        and certain foreign countries.  When the Company grants credit, it is
        primarily to customers whose ability to pay is dependent upon the
        agribusiness economics prevailing in that specific area of the world.
        No significant concentration of credit risk exists.

        REVENUE RECOGNITION - The Company recognizes revenues upon shipment
        of goods, with discounts and returned goods partially offsetting this
        amount.<PAGE>



        <PAGE>
                             DEKALB Genetics Corporation
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


        RECLASSIFICATIONS - Certain expense reclassifications have been made
        for segment comparability purposes.  These reclassifications had no
        effect on net earnings.

        USE OF ESTIMATES - The preparation of financial statements in
        conformity with generally accepted accounting principles requires
        management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and disclosure of contingent assets
        and liabilities at the date of the financial statements and the
        reported amounts of revenues and expenses during the reporting
        period.  Actual results could differ from those estimates.

        DEFERRED LICENSING COSTS - The Company defers direct costs associated
        with company-owned swine licensed under the royalty program.  Revenue
        recognition under a third party licensing agreement occurs, in part,
        at initiation of the license and, in future years, in the form of
        royalties from selected progeny.  The costs deferred are direct
        costs, primarily feed and the labor to produce the swine.  These
        costs are amortized in proportion to the estimated revenue from the
        license agreement.  The average license period is 2.5 years.  The
        amount of costs deferred (net) in fiscal 1998, 1997, and 1996 was
        $0.3 million, $2.3 million, and $3.0 million, respectively.

        EARNINGS PER SHARE - Basic earnings per share of common stock are
        calculated by dividing net earnings by the weighted average of common
        shares outstanding during each fiscal year; 34,577,265, 34,250,522
        and 32,515,743 in 1998, 1997 and 1996, respectively.  Diluted
        earnings per share of common stock are calculated by dividing net
        earnings by the weighted average of common and common equivalent
        (stock options) shares outstanding during each fiscal year;
        36,364,767, 35,744,050 and 33,553,649 in 1998, 1997 and 1996,
        respectively.  During fiscal 1998 the Company adopted the Financial
        Accounting Standards Board issued Statement No. 128, `Earnings Per
        Share,' effective February 28, 1998.  Shares outstanding and per
        share amounts have been restated for prior years.

        STOCK-BASED COMPENSATION - The Company continues to account for its
        employee stock option plans using Accounting Principles Board Opinion
        No. 25, `Accounting for Stock Issued to Employees,' which results in
        no charge to earnings when options are issued at fair market value.
        The Company has adopted the disclosure requirements of Financial
        Accounting Standards Board Statement No. 123, Accounting for Stock-
        Based Compensation.

        NEW ACCOUNTING STANDARDS - The Company adopted Financial Accounting
        Standards Board Statement No. 121, `Accounting for the Impairment of
        Long Lived Assets and for Long Lived Assets to be Disposed Of,' in
        fiscal 1997.  The new accounting standard had no impact on the
        carrying value of the Company's long lived assets as of August 31,
        1997 and 1998.

        During fiscal year 1997, the Financial Accounting Standards Board
        issued Statement No. 128, `Earnings Per Share,' effective for both<PAGE>



        interim and annual periods ending after December 15, 1997.  The
        standard simplifies the computation of earnings per share and will be
        comparable to fully diluted earnings per share presently reflected
        under APB Opinion No. 15.  During fiscal 1998 the Company adopted the
        Financial Accounting Standards Board issued Statement No. 128,
        `Earnings Per Share,' effective February 28, 1998.  Shares
        outstanding and per share amounts have been restated for prior years.

        In June 1997 the Financial Accounting Standards Board issued
        Statement No. 130, `Reporting Comprehensive Income,' which
        establishes standards for reporting of comprehensive income.  This
        pronouncement requires that all items be recognized as components of
        comprehensive income, as defined in the pronouncement, be reported in
        a financial statement that is displayed with the same prominence as
        other financial statements.  Comprehensive income included all
        changes in equity during a period except those resulting from
        investments by owners and distributions to owners.  The financial
        statement presentation required under Statement No. 130 is effective
        for all fiscal year's beginning after December 15, 1997.  The Company
        had planned to adopt Statement No. 130 in fiscal 1998, but due to the
        pending sale of the Company, management decided to delay adoption.
        As of August 31, 1998, the impact of adopting this pronouncement has
        not been determined, however; the Company expects it will be affected
        by it.

        In June 1997, the Financial Accounting Standards Board issued
        Statement No. 131, `Disclosures about Segments of an Enterprise and
        Related Information,' which amends the requirements for a public
        enterprise to report financtial and descriptive information about its
        reportable operating segments.  Operating segments, as defined in the
        pronouncement, are components of an enterprise about which separate
        financial information is available that is evaluated regularly by the<PAGE>



        <PAGE>

                             DEKALB Genetics Corporation
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

        company in deciding how to allocate resources and in accessing
        performance. The financial information is required to be reported on
        the basis that is used internally for evaluating segment performance
        and deciding how to allocate resources to segments.  The disclosures
        required by Statement No. 131 are effective for all fiscal years
        beginning after December 15, 1997.  The Company had planned to adopt
        Statement No. 131 in fiscal 1998, but due to the pending sale of the
        Company, management decided to delay adoption.  This pronouncement
        will have an affect on the Company's reporting in the subsequent
        periods. However, as of August 31, 1998, the impact of this
        pronouncement has not been determined.

        In July 1998 the Financial Accounting Standards Board issued
        Statement No. 133, `Accounting for Derivative Instruments and for
        Hedging Activities,' which replaces existing pronouncements and
        practices with a single, integrated accounting framework for
        derivatives and hedging activities.  The Company plans to adopt
        Statement No. 133 in fiscal 1999. This pronouncement will have an
        affect on the Company's reporting in the subsequent periods. However,
        as of August 31, 1998, the impact of this pronouncement has not been
        determined.<PAGE>





          <PAGE>

                             DEKALB Genetics Corporation
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued



          B.STOCK SPLIT
          .

           During fiscal year 1997 the Company declared a two-for-one
           stock split effected in the form of a stock dividend.
           Shares were distributed on August 8, 1997 to holders of
           record on July 25, 1997.  The Company's annual cash dividend
           was subsequently adjusted to 14 cents per share from 28
           cents per share.

           In fiscal 1996, the Company delared a three-for-one stock
           split effected in the form of a stock dividend to holders of
           record May 10, 1996 with shares being distributed on May 24,
           1996.  Following this split, the quarterly cash dividend was
           increased five percent.

           All share numbers and earnings per share information in this
           document have been adjusted to reflect these stock splits.









          <TABLE>
          CAPTION
<PAGE>







          C. STATEMENT OF OPERATIONS DATA


           for the years ended August 31 -     1998     1997     1996
              in millions
          <S>                                <C>      <C>      <C>
          (1)  Interest Expense, Net

           Interest expense                  $(12.6)  $ (7.5)  $ (8.3)
           Interest income                      3.1      2.6      2.2
                                             ________ ________ ________

            Interest Expense, net            $ (9.5)  $ (4.9)  $ (6.1)<PAGE>





          =============================================================


           for the years ended August 31 -     1998     1997     1996
             in millions

          (2)  Other Income, Net

           Equity in net earnings of          $  4.7   $  4.0   $  1.7
          related companies
           Gain(Loss) on sale of fixed          (0.6)     0.6      0.2
          assets
           All others, net                      (3.7)    (0.6)    (0.5)
          _____________________________________________________________


            Other income, net                 $  0.4   $  4.0   $  1.4
          =============================================================

           for the years ended August 31 -     1998     1997     1996
              in millions


          (3)  Research and Development
              Expense

           DEKALB Seed                        $ 70.3   $ 50.2   $ 40.9
           DEKALB Swine                          6.8      7.1      6.7

             Research and development         $ 77.1   $ 57.3   $ 47.6
              expense
          =============================================================<PAGE>





          /TABLE
<PAGE>





          <PAGE>
          <TABLE>
          CAPTION
<PAGE>





                              DEKALB Genetics Corporation
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued




          <S>                                        <C>        <C>
          D.RECEIVABLES

          at August 31 - in millions                   1998      1997
          _____________________________________________________________

          Trade accounts and notes                   $  66.1    $  64.9
          Employees                                      1.8        2.1
          Related companies                              0.7        0.2
          Other                                          8.2        5.6
                                                     $  76.8    $  72.8
          Less allowance for doubtful accounts           7.3        5.3

            Receivables, net                         $  69.5    $  67.5
          =============================================================
          E.INVENTORIES

          at August 31 - in millions                   1998      1997
          _____________________________________________________________

          At lower of cost or market:
            Commercial seed-average cost             $ 168.8    $ 124.5
            Commercial swine-average cost                9.3       10.0
            Supplies and other-principally first-in,
             first-out                                   6.4        4.6
                                                     _______    _______

            Inventories                              $ 184.5    $ 139.1
          =============================================================<PAGE>





          /TABLE
<PAGE>





          <PAGE>
          <TABLE>
          CAPTION
<PAGE>





                           DEKALB GENETICS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _____________________________________________________________


           F.PROPERTY, PLANT AND EQUIPMENT, NET (AT COST)
          <S>                                        <C>        <C>
            at August 31 - in millions                 1998      1997
          _____________________________________________________________

            Land                                     $  9.5     $  9.6
            Buildings                                 124.3       97.7
            Equipment                                 150.2      156.0
            Other                                      36.0       11.9
            Construction in progress                   72.1       45.9
          _____________________________________________________________

                                                      392.1      321.1
            Less accumulated depreciation and
              amortization                            154.3      155.0
          _____________________________________________________________


              Property, plant and equipment, net     $237.8     $166.1<PAGE>





          =============================================================<PAGE>
<PAGE>







          G.OTHER CURRENT LIABILITIES

            at August 31 - in millions                 1998      1997
          _____________________________________________________________

            Current income taxes                     $  4.1     $  2.9
            Payroll                                     9.9        8.4
            Vacation                                    3.4        3.2
            Pensions and other credits                  0.5        3.3
            Insurance                                   1.8        2.5
            Taxes, other than income                    3.4        3.5
            Production costs                           10.4       10.8
            Other                                      15.7       11.5
          _____________________________________________________________

              Other current liabilities              $49.2      $46.1<PAGE>





          /TABLE
<PAGE>





          <PAGE>
                           DEKALB GENETICS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          ______________________________________________________________


          H.FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

           During 1995, the Company adopted Statement of Financial
           Accounting Standards No. 119, `Disclosures About Derivative
           Financial Instruments and Fair Value of Financial
           Instruments'.  This statement in conjunction with Statement
           of Financial Accounting Standards No. 107, `Disclosures
           About Fair Value of Financial Instruments' requires certain
           disclosures about the fair value of financial instruments,
           including derivative financial instruments for which it is
           practicable to estimate fair value.

           The following methods and assumptions were used to estimate
           the fair market value of each class of financial instrument.

           TRADE ACCOUNTS AND NOTES RECEIVABLE

           The carrying amount of the Company's trade accounts and
           notes receivable approximates market value.

           SHORT-TERM AND LONG-TERM DEBT

           Short-term debt represents borrowings against lines of
           credit with various banks.  The weighted average interest
           rate on short-term borrowings for fiscal 1998 was
           approximately 6.0%.  At August 31, 1998, committed lines of
           credit available to DEKALB included a $50 million revolving
           credit agreement and $15 million in credit facilities for a
           364 day period.

           The revolving credit agreement provides credit for general
           purposes and is committed through December 31, 2003, but may
           be extended annually for successive one year periods with
           the consent of the lending banks.  The line of credit
           requires a step-down to $20.0 million for any one day during
           each year.  The agreement contains various restrictions on
           the activities of the Company as to minimum tangible net
           worth, amount and type of indebtedness and the acquisition
           or disposition of capital shares or assets of the Company
           and its subsidiaries.  At August 31, 1998, tangible net
           worth was approximately $172.5 million, which meets these
           covenant requirements.  The Company pays a commitment fee of
           1/10 of 1% for the active portion of its line of credit.
           The base amount of $20.0 million is available throughout the
           year.  An additional $30.0 million available for seasonal
           needs during six months of the year beginning as early as
           October 31, of any year but no later than December 31 of the
           same year.  The available line of credit at August 31, 1998
           was entirely unused.<PAGE>





           The $15 million in credit facilities carry a 5 basis point
           fee on the unused portion of the commitment.  The line was
           fully utilized in fiscal 1998 and, therefore, no fees were
           required.

           The carrying amount of the Company's long-term debt and all
           the Company's short-term debt approximates market value
           because rates on those debt agreements are variable and are
           set periodically based on current rates during the year.
           Exceptions would be the $20 million long-term loan which has
           a fixed rate of 7.15%, two $5 million long-term loans which
           have fixed rates of 7.56% and 6.98%, respectively, two $10
           million long-term loans with fixed rates of 6.93% and 6.5%,
           respectively, a $4 million long-term loan with a fixed rate
           of 10.25% and a $5 million long-term loan with a fixed rate
           of 10.5%.  The Company estimated the market value of its
           long-term debt by utilizing a discounted cash flow
           methodology.<PAGE>





          <PAGE>
                           DEKALB GENETICS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



          H.FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (CONTINUED)


           SWAP AGREEMENTS

           The Company has entered into interest rate swap agreements with
           third parties to manage interest rate movements on the majority
           of its variable rate term debt.  At August 31, 1998, the Company had
           swap agreements with an aggregate notional principal amount of $40
           million and an average interest rate of 6.0 percent, maturing in
           fiscal 2003.  Any interest rate differential on these swap agreements
           is recognized in interest expense, net over the terms of the
           agreements.  The interest expense related to swap agreements was
           $0.1 million for years 1998, 1997 and 1996.  The Company is exposed
           to credit loss in the event of nonperformance by the other parties
           to the agreements.  However, the Company does not anticipate
           nonperformance by any of those parties.  The Company estimated the
           market value of its interest rate swap agreements by utilizing a
           discounted cash flow methodology.

           DERIVATIVES

           DEKALB has contractual commitments with seed growers for
           payments based on local market corn and soybean commodity
           prices.  To mitigate the impact of fluctuation in these
           prices on inventory costs, the Company hedges these payments
           by using Chicago Board of Trade corn and soybean futures
           contracts.  Growers not priced at the end of August are
           normally priced by March, at which time the related futures
           contracts are closed.  The Company estimates the timing of
           grower payment pricing to determine the futures maturities.
           In addition, the Company, from time to time, hedges its
           exposure to price fluctuations in grain used for swine feed.
           Gains or losses on these hedge positions are included as a
           component of the applicable year's inventory.  At August 31,
           1998 and 1997, the Company had corn and soybean futures
           contracts outstanding with a contract market value of $28.8
           million and $1.6 million, respectively.  Margin deposits for
           open futures and/or option contracts are recorded as other
           current assets.

           DEKALB sells market hogs, which are by-products from the
           production of breeding animals, to independent processing
           and packing firms at the premium to the major market
           averages.  The Company periodically hedges against the
           exposure of price fluctuations in these markets by using
           Chicago Mercantile Exchange hog futures contracts.  At
           August 31, 1998 the  Company had hog futures contracts
           outstanding with a contract market value of $0.1 million.
           At August 31, 1997, the Company had no hog futures contracts
           outstanding.

           As of August 31, 1998 the net unrecognized loss on open
           futures contracts was $5.0 million.  As of August 31, 1997
           the net unrecognized gain on open futures contracts was $0.1
           million.

           The Company reviews potential foreign currency risks on an on-going
           basis and is party to forward contracts in the management of its
           foreign currency exposure related to royalty income and export
           sales.  In order to reduce its exposure to foreign currency
           fluctuation related to royalty payments from its French licensee
           and export receipts from its Italian subsidiary, the Company
           utilizes foreign currency forward contracts with maturities that
           mirror the anticipated receipts and payments in October and
           November.  At August 31, 1998 and 1997, the Company had French
           franc forward contracts outstanding with an aggregate contract
           market value of $4.4 million and $6.3 million, respectively, and
           Italian lira forward contracts outstanding with an aggregate
           contract market value of $4.9 million and $5.8 million,
           respectively.  Other foreign currency transactions occur in the
           Argentine peso and Canadian dollar, although there were no foreign
           currency contracts outstanding for those currencies at year end.
           The Company had an unrealized gain of $0.2 million in fiscal 1998
           and $1.5 million in fiscal 1997 related to the aggregate of all
           foreign currency contracts.

           The fair value of cash equivalents, receivables, short-term
           borrowings, long-term debt, and interest rate swaps approximates
           carrying value at August 31, 1998.






          <PAGE>
          <TABLE>
          CAPTION
<PAGE>





                             DEKALB GENETICS CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          __________________________________________________________________


          I.LONG-TERM DEBT
                                                       1998           1997
           at August 31 - in millions
          __________________________________________________________________
          <S>                                        <C>            <C>

            Term loans, variable rates, due          $  55.0        $  50.0
              2000-2003
            Term loans, 7.15% fixed rate, due from      20.0           20.0
               1999-2007
            Term loan,   7.56% fixed rate, due from      5.0            5.0
               1999-2005
            Term loan,   6.98% fixed rate, due from      5.0            5.0
               1999-2006
            Term loan,   6.93% fixed rate, due 2003     10.0           10.0
            Term loan,   6.50% fixed rate, due 2003     10.0            -
            Term loan,   10.25% fixed rate, due 2000     4.0            -
            Term loan,   10.50% fixed rate, due 2000     5.0            -
          __________________________________________________________________
                                                       114.0           90.0
              Less current maturities                    1.1            -
          __________________________________________________________________

              Net long-term debt                     $ 112.9        $  90.0
          ==================================================================<PAGE>





          </TABLE>

           The variable rate term loan agreements allow the Company to
           borrow at rates based on the London Interbank Offer Rate on
           Eurodollar deposits (LIBOR).  At August 31, 1998, interest on
           the variable rate term loans was at a rate of approximately
           6.0%.

           All of the term loans contain similar restrictive covenants.
           The most restrictive of these covenants requires the maintenance
           of a minimum tangible net worth.  At August 31, 1998, the
           Company is in compliance with all the debt covenants.

           Aggregate maturities for the years ending August 31, 2000
           through 2002 are $10.4 million, $4.3 million, and $15.3 million,
           respectively.  The remaining $82.9 million matures between 2003
           and 2007.  There are long-term debt maturities of $1.1 million
           in 1999.





          J.SAVINGS AND INVESTMENT PLAN


           Effective September 1, 1995, the Company provides to each full
           and part-time employee a guaranteed contribution to the Savings
           and Investment Plan (401(k)).  For fiscal 1996, the contribution
           was one percent of each employee's compensation covered by the
           Plan.  Beginning in fiscal 1997, the Company's guaranteed
           compensation-based contribution is equal to two percent of each
           employee's pay.

           Additionally, each full and part-time DEKALB employee can
           voluntarily contribute to the Savings and Investment Plan.  The
           plan provides for DEKALB to match a minimum of $.50 for every
           dollar contributed by employees, to the extent employees
           contribute up to 6% of their salaries.  Additional discretionary
           awards may also be contributed when warranted by results of
           operations.  DEKALB's contributions charged to expense under
           this plan were $2.0 million, $3.8 million, and $3.9 million for
           the years ended August 31, 1998, 1997, 1996, respectively.<PAGE>





          <PAGE>
                           DEKALB GENETICS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



          K.COMMITMENTS AND CONTINGENT LIABILITIES.

           DEKALB is a defendant in various legal actions arising in
           the course of business activities.  In the opinion of the
           Company's management, these actions will not result in a
           material adverse effect on DEKALB's consolidated results of
           operations or financial position.  Additional information is
           in Part I, Item 3 - Legal Proceedings in this Form 10-K.

           DEKALB is self-insured against property losses on the
           majority of its operating facilities.

           DEKALB's total rental and lease expense for fiscal years
           1998, 1997 and 1996 was $15.7 million, $9.7 million and $6.7
           million, respectively.<PAGE>





          <PAGE>
          <TABLE>
          CAPTION
<PAGE>





                           DEKALB GENETICS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          ______________________________________________________________

          L.INCOME TAX
          ______________________________________________________________

           for the year ended August 31
             - in millions                    1998      1997      1996
           ___________________________________________________________
           <S>                                <C>       <C>       <C>
           Current provision:
             Federal                        $ (0.3)   $  4.4    $  5.9
             State                            (0.5)      1.4       1.1
             Foreign                          10.1       5.8       2.3
           ____________________________________________________________
                                            $  9.3    $ 11.6    $  9.3
           ____________________________________________________________
           Deferred provision:
             Federal                          (1.9)      5.1    $  1.9
             State                            (1.1)      1.1      (0.4)
             Foreign                          (1.4)     (0.2)      0.3
           ____________________________________________________________
                                            $ (4.4)   $  6.0    $  1.8
           ____________________________________________________________

               Total income tax provision   $  4.9    $ 17.6    $ 11.1
           ============================================================

           The significant components of the company's deferred tax
           assets and deferred tax liabilities are presented below:


           for the year ended August 31
             - in millions                    1998      1997
           ____________________________________________________

           Deferred tax assets:
             Research Expenditures          $  5.8    $  4.9
             Benefit Plans                     3.9       2.8
             Inventory                        11.3       4.8
             Other                             7.7       5.2
           ____________________________________________________
               Total Gross Deferred Tax
                 Assets                     $ 28.7    $ 17.7
               Valuation Allowance            (2.8)     (0.8)
           ____________________________________________________
                 Gross Deferred Tax Assets  $ 25.9    $ 16.9
           ____________________________________________________
           Deferred tax liabilities:
             Purchase Price Allocations      (10.2)    (10.2)
             Undistributed Foreign Earnings   (4.7)     (4.8)
             Depreciation                    (12.9)     (6.9)
             Other                            (6.7)     (8.2)
           ___________________________________________________
             Gross Deferred Tax<PAGE>





               Liabilities                  $(34.5)   $(30.1)
           Net Deferred Tax Liability       $ (8.6)   $(13.2)<PAGE>





           ===================================================<PAGE>





          </TABLE>

           The net deferred tax liability disclosed above equals the
           deferred tax on the balance sheet.  The footnote disclosure
           classified the components as assets or liabilities while the
           balance sheet discloses the current and long-term portion of
           those two classifications.  The valuation allowance relates
           to those deferred tax assets that may not be fully realized.

           Total tax provisions (benefits) resulted in amounts
           differing from those based on the statutory federal income
           tax rates.  The reasons for these differences are:


          TABLE
<PAGE>





           ___________________________________________________________
           <S>                                <C>       <C>       <C>
           for the years ended August 31 -    1998      1997      1996
           in millions

           U.S. statutory rate              $  5.3    $ 16.2    $  9.9
           State and local taxes              (1.1)      1.7       1.0
           International operations           (0.3)     (0.3)     (0.1)
           Qualified export activity           -        (0.1)     (0.1)
           Research credits                   (2.1)     (0.7)      -
           Other                               3.1       0.8       0.4
           ___________________________________________________________
             Income tax provision           $  4.9    $ 17.6    $ 11.1
           ===========================================================

           The domestic and foreign components of earnings before taxes
           of consolidated companies were as follows:
           ___________________________________________________________
           for the years ended August 31
             - in millions                    1998      1997      1996
           ___________________________________________________________

           U.S.                             $ (5.2)   $ 35.8    $ 25.3
           Argentina                          19.0       8.3       2.3
           Other Non-U.S.                      1.4       2.3       0.5
             Total earnings before taxes    $ 15.2    $ 46.4    $ 28.1
           ============================================================<PAGE>





          /TABLE
<PAGE>





          <PAGE>

                            DEKALB GENETICS CORPORATION
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _______________________________________________________________

          M.QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)


           The following is a summary of the unaudited quarterly results
           of operations for the years ended August 31, 1998 and 1997.
           DEKALB's North American seed operations comprise a significant
           portion of its business.  DEKALB generally delivers only a
           minor portion of North American seed in the first quarter,
           delivers more than half in the second quarter, and
           substantially all the seed is delivered by the end of the
           third quarter.  The Company defers first quarter expenses and
           anticipates fourth quarter expenses and matches these expenses
           against second and third quarter revenues.  Third quarter
           results also reflect estimates of seed product returns.
           Consequently, fourth quarter earnings include adjustments for
           those earlier estimates.

           The total of four quarters' earnings per share might not equal
           the earnings per share for the year due to the application of
           the treasury stock method and market price changes.


          <TABLE>
          <CAPTION>
          _________________________________________________________________<PAGE>







            in millions except per
            share amounts - three
            months ended the last
            day of                     Nov       Feb       May       Aug
            ______________________________________________________________
            <S>                                <C>       <C>       <C>
            1998
              Revenues               $ 62.8    $213.8    $219.9    $  5.7
              Cost of Revenues         34.1     106.5     124.2      10.4
              Net earnings              2.7      19.3       2.8     (14.5)
              Basic earnings per
               share                    0.08      0.56      0.08    (0.42)
              Diluted earnings per
                share                $  0.08   $  0.53   $  0.08   $(0.40)
            ==============================================================

            1997
              Revenues               $ 67.1    $192.3    $178.6    $13.4
              Cost of Revenues         38.9      93.4      89.0      9.2
              Net earnings              2.1      16.3      13.1     (2.7)
              Basic earnings per
                share                   0.06      0.48      0.38    (0.08)
              Diluted earnings per
                share                $  0.06   $  0.46   $  0.36   $(0.07)
            ==============================================================<PAGE>





          /TABLE
<PAGE>





          <PAGE>
                             DEKALB GENETICS CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _________________________________________________________________


          N.OPERATION BY GEOGRAPHIC AREA


           Information on DEKALB's operations by geographic area for
           fiscal years 1998, 1997 and 1996 is shown below.  Operating
           earnings are equal to total revenues less expenses of the
           geographic areas, excluding interest and general corporate
           expenses.  Transfers of products between geographic areas are
           at prices approximating those charged to unaffiliated customers
           and are not material to any geographic area.
          <TABLE>
          <CAPTION>
             __________________________________________________________

             August 31 - in millions         1998      1997      1996
             __________________________________________________________
             <S>                           <C>        <C>       <C>
             Revenues
                United States              $ 372.8    $ 343.6   $ 300.9
                Argentina                     87.3       67.3      49.8
                Other Non-U.S.                42.1       40.5      36.8
             __________________________________________________________
                                           $ 502.2    $ 451.4   $ 387.5
             ==========================================================

             Operating Earnings
                United States              $   0.4    $  38.2   $  30.1
                Argentina                     24.6       11.7       5.6
                Other Non-U.S.                 5.0        5.9       3.7
             __________________________________________________________

                                           $  30.0    $  55.8   $  39.4
             ==========================================================

             Equity in Earnings
                Other Non-U.S.             $   4.7    $   4.0   $   1.7
             ==========================================================

             Identifiable Assets
                United States              $ 452.1    $ 332.4   $ 256.8
                Argentina                    120.1       86.0      77.7
                Other Non-U.S.                18.6       31.2      28.8
             __________________________________________________________

                                           $ 590.8    $ 449.6   $ 363.3
             ==========================================================
          </TABLE>
          Consolidated net assets included approximately $69.6 million
          at August 31, 1998 and $55.8 million at August 31, 1997,
          located in countries other than the United States.<PAGE>





          Consolidated net earnings included approximate earnings of
          $22.3 million in fiscal year 1998 and $13.7 million in fiscal
          year 1997 from these countries.<PAGE>





          <PAGE>
                            DEKALB GENETICS CORPORATION
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


          O. PENSION PLANS

             Prior to fiscal 1994, the Company provided employees a
             noncontributory pension plan covering substantially all
             domestic employees who met age and service requirements.
             Benefits provided under this pension plan are based primarily
             on each employee's career earnings up until the suspension of
             the plan on October 1, 1993.  Plan assets consist primarily
             of stocks and U.S. government securities.  At the time of
             suspension, the Company recognized a pre-tax curtailment
             benefit of $3.7 million.


             In addition, DEKALB has a supplemental noncontributory
             pension plan covering certain management employees, which is
             not funded.  Benefits are based mainly on each participant's
             years of service, final average compensation, and estimated
             benefits received from certain other benefit plans.  This
             plan was suspended in fiscal 1994 and reinstated in fiscal
             1997. During fiscal 1998 the Company recorded an expense of
             $0.2 million.


              The components of total estimated pension income (expense)
             for the two plans are as follows:
          <TABLE>
          CAPTION
<PAGE>





             ______________________________________________________________

             August 31 - in millions
                                                 1998      1997      1996
             ______________________________________________________________
             <S>                                <C>       <C>       <C>
             Service Cost - benefits earned     $  0.2    $  0.1    $ -
             during the year
             Interest cost on projected benefit    1.0       0.9      0.7
             obligations
             Actual return on plan assets         (0.3)     (2.4)    (1.2)
             Net amortization and deferral        (0.6)      1.6      0.3
             ______________________________________________________________

               Net Pension Income (Expense)     $  0.3    $  0.2    $(0.2)
             ==============================================================<PAGE>





          /TABLE
<PAGE>





          <PAGE>

                             DEKALB GENETICS CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _________________________________________________________________
          O.PENSION PLANS (CONTINUED)

             Actuarial assumptions for August 31, 1998 are a discount rate
             of 7.00% and a return on plan assets of 8.5%.  Assumptions for
             August 31, 1997 are a discount rate of 7.25% and a return on
             plan assets of 8.5%.

             A reconciliation of the funded status to accrued pension
             expense is as follows:



          <TABLE>
          CAPTION
<PAGE>





                                         Funded Plan        Unfunded Plan
             August 31 - in millions   1998      1997      1998      1997
             ______________________________________________________________
             <S>                      <C>       <C>       <C>       <C>
             Actuarial present value
              of benefits based on
              service to date and
              present
                pay levels:
                  Vested              $ 8.4     $  7.6    $ 1.8     $ 1.9
                  Nonvested             0.7        0.9      0.1        -
             ______________________________________________________________

             Accumulated benefit
              obligation                9.1       8.5       1.9       1.9

             Additional amounts
              related to projected
              pay increases             -         -         3.7       3.2
             ______________________________________________________________

             Projected benefit
              obligation                9.1       8.5       5.6       5.1

             Plan assets at fair
              market value              8.7       9.6       -         -
             ______________________________________________________________

             Plan assets less than
              projected benefit
              obligation               (0.4)      1.1      (5.6)     (5.1)


             Unrecognized loss
              from experience           2.7       1.1       4.5       4.2

             Unrecognized net
              transition asset         (2.0)     (2.3)      -         -
             ______________________________________________________________

             Accrued pension expense
              included in the
              Consolidated Balance
              Sheet                   $ 0.3     $(0.1)    $(1.1)    $(0.9)
             ==============================================================<PAGE>





          </TABLE>
             The Company has obligations under termination indemnification
             plans in several foreign countries, but does not have any
             foreign defined benefit pension plans as defined in Financial
             Accounting Standard No. 87.<PAGE>





          <PAGE>
                            DEKALB GENETICS CORPORATION
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _______________________________________________________________

          P.INFORMATION ON RELATED COMPANIES

           The following is summarized financial information for DEKALB's
          less than 50 percent owned operations:



          <TABLE>
          CAPTION
<PAGE>





             Balance Sheets

              at August 31 - in millions    1998      1997
             _______________________________________________
             <S>                           <C>        <C>
             ASSETS
               Current assets              $ 17.7    $ 17.7
               Non-current assets             2.6       2.6
             _______________________________________________

               Total Assets                $ 20.3    $ 20.3
             ===============================================



             LIABILITIES
               Current liabilities         $  3.9    $  3.6
               Non-current liabilities        2.9       3.1
             _______________________________________________

               Total Liabilities           $  6.8    $  6.7
             ===============================================<PAGE>





          </TABLE>

          <TABLE>
          CAPTION
<PAGE>





             Summary of Earnings
             _________________________________________________________

             for the years ended
               August 31 - in millions      1998      1997      1996
             _________________________________________________________
             <S>                           <C>       <C>       <C>
               Revenues                    $ 25.8    $ 23.3    $ 15.5
             =========================================================

               Gross Profit                $ 14.3    $ 12.9    $  7.1
             =========================================================

               Net Earnings                $  9.3    $  8.1    $  3.4
             =========================================================
               DEKALB's Equity in Net
                Earnings                   $  4.7    $  4.0    $  1.7
             =========================================================<PAGE>





          </TABLE>

             DEKALB's investments in related companies are carried at
             cost plus equity in undistributed net earnings and losses
             since dates of acquisition.  Carrying values approximate
             DEKALB's interest in the net assets of these related
             companies.  Dividends received from related companies
             were $3.9 million in fiscal year 1998 and $1.8 million in
             fiscal year 1997.  No dividends were received in fiscal
             year 1996.<PAGE>





          <PAGE>
                            DEKALB GENETICS CORPORATION
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          ______________________________________________________________
                                       ____

          Q.INCENTIVE PLANS

            In August, 1988, the Company initially adopted a Long-Term
            Incentive Plan which provided for the awarding of stock
            appreciation rights (SARs), restricted stock and incentive
            and nonqualified options to purchase Class A or Class B
            Common Stock of the Company.  The Company's Stock Option
            Committee may make awards of SARs, restricted stock or stock
            options to certain officers and key employees of the
            Company.  All stock options may be granted at no less than
            fair market value of the Company's stock at the date of
            grant and are exercisable within periods specified by the
            Stock Option Committee.

            The following share information reflects the two-for-one and
            the three-for-one stock splits.

          <TABLE>
          CAPTION
<PAGE>





                                  1998          1997          1996
                                _________     _________     _________

                                 Class A       Class A       Class A
                                __________    _________     _________
          <S>                  <C>           <C>            <C>
          Shares under option
          at beginning of year  1,623,114     1,517,136     1,422,924
          Activity:
           Granted                372,550       267,000       343,800
           Exercised                                         (239,382)
                               (25,523)      (133,122)
           Canceled                                           (10,206)
                               (2,134)       (27,900)      __________
                               __________    __________

          Shares under option
           at end of year       1,968,007     1,623,114     1,517,136
                               ==========    ==========    ==========

          Shares available for
           future grants as of
           August 31            1,530,792     1,622,914     2,140,308
          Shares vested and
           exercisable as of
           August 31            1,315,361     1,043,514       917,934

          Price range of       $4.46 -       $ 0.33 -      $ 4.40 -
           options exercised    $30.38        $  8.04       $  6.25
          Price range of
           shares under option $0.33 -       $ 0.33 -      $ 0.33 -
           at end of year       $30.38        $30.38        $ 8.04<PAGE>





          </TABLE>


          In fiscal 1991, the shareholders also approved a Director
          Stock Option Plan which gives outside directors an election
          to receive options to purchase Class A Common Stock (which
          options have a discounted exercise price) in lieu of annual
          retainer and meeting fees.  The 25% discount in the exercise
          price, multiplied by the number of shares subject to the
          option, equals the annual retainer and meeting fees the
          directors would have received.  Total expense for the
          Director Stock Option Plan was $0.1 million in each of the
          fiscal years 1998, 1997 and 1996.




          <TABLE>
          CAPTION
<PAGE>





                                  1998          1997          1996
                                _________     _________     _________

                                 Class A       Class A       Class A
                                __________    _________     _________
          <S>                  <C>           <C>            <C>
          Shares under option
           at beginning of
           year                  390,138       390,166       323,472
          Activity:
           Granted                23,379        20,972        69,678
           Exercised             (34,495)      (21,000)       (2,984)
           Canceled                 (273)            -             -
                               __________    __________    __________

          Shares under option
           at end of year        378,749       390,138       390,166
                               ==========    ==========    =========

          Shares available for
           future grants as of
           August 31              86,688      109,774       130,746
          Shares vested as of
           August 31             378,749      390,138       390,166
          Shares exercisable
           as of August 31       355,370      369,166       320,488

          Price range of        $ 3.35 -     $ 3.35 -
           options exercised     $ 6.03        $ 3.38       $ 4.19
          Price range of
           shares under option  $ 3.35 -     $ 3.35 -      $ 3.35 -
           at end of year        $22.03        $22.03        $ 6.03<PAGE>





          /TABLE
<PAGE>





          <PAGE>
                            DEKALB GENETICS CORPORATION
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          ______________________________________________________________
                                       ____

          Q.INCENTIVE PLANS (CONTINUED)


            The Company applies APB 25 and related interpretations in
            accounting for its plans.  Accordingly, no compensation cost
            has been recognized for stock options granted under the
            August 1998 Long Term Incentive Plan.  If compensation costs
            for stock options had been determined based on the fair
            value at the grant dates for awards under these plans
            consistent with the method of SFAS 123, the Company's net
            earnings and net earnings per share would have been reduced
            to the pro forma amounts indicated as follows:

          <TABLE>
          CAPTION
<PAGE>





                                       1998        1997
                                     _________   _________
           <S>                      <C>         <C>
            Net Earnings:
             ($ in millions)
               As Reported           $  10.3     $  28.8
               Pro Forma             $   7.8     $  27.6
            Basic Earnings Per
             Share:
               As Reported           $   0.30    $   0.84
               Pro Forma             $   0.23    $   0.81
            Diluted earnings per
             share
               As reported           $   0.28    $   0.81
               Pro forma             $   0.21    $   0.77<PAGE>





          </TABLE>

            In accordance with SFAS 123, the fair value approach to
            valuing stock options used for pro forma presentation has
            not been applied to stock options granted prior to
            September 1, 1995.  The compensation cost calculated under
            the fair value approach is recognized over the vesting
            period of the stock options.

            The weighted average fair value of options granted was
            $18.59 per share and $17.20 per share during 1998 and
            1997, respectively.  The fair value is estimated on the
            date of grant using the Black-Scholes option pricing model
            with the following weighted average assumptions used for
            grants in 1998 and 1997, respectively:  dividend yield of
            0.2% and 0.4%; expected volatility of 45.4% and 32.8%;
            risk-free interest rates of 5.3% and 6.5%; and an expected
            life of seven years.<PAGE>





          <PAGE>
                           DEKALB GENETICS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED



          R.INDUSTRY SEGMENT

           The following industry segment information summarized
           DEKALB's operations as of and for the years ended August 31,
           1998, 1997, and 1996.

           Operating earnings are total sales and revenues less
           operating expenses of the segments, excluding interest, and
           general corporate allocations.

           No customer accounted for 10 percent or more of total
           operating revenues.<PAGE>





          <PAGE>
          <TABLE>
          <CAPTION>

                             DEKALB GENETICS CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _________________________________________________________________

         R.  INDUSTRY SEGMENT (CONTINUED)<PAGE>






            August 31 - in millions         1998       1997       1996
            ____________________________________________________________
            <S>                           <C>        <C>        <C>

            Revenues
            _____________________________

              Seed (1)                    $ 453.1    $ 394.8      340.4
              Swine                          49.1       56.6       47.1
                                          ________   ________   ________

                                          $ 502.2    $ 451.4    $ 387.5
                                          =======    =======    =======

            Earnings (Loss) Before
             Income Taxes
            _____________________________

              Seed:
                Operating earnings        $  35.0    $ 54.3     $  39.2
                Equity in net earnings
                  of related companies        4.7       4.0         1.7
                                          ________   ________   ________

                                          $  39.7    $  58.3    $  40.9

              Swine                          (5.0)       1.5        0.2
                                          ________   ________   ________

                  Total Operations        $  34.7    $  59.8    $  41.1

               General corporate expenses   (10.0)      (8.5)      (6.9)
               Net interest expense          (9.5)      (4.9)      (6.1)
                                          ________   ________   ________

                                          $  15.2    $  46.4    $  28.1
                                          =======    =======    =======

            Identifiable Assets
            _____________________________

              Seed                        $ 561.2    $ 413.1    $ 329.8
              Swine                          29.4       36.1       32.7
              Discontinued Operations         0.2         0.4       0.8
                                          ________   ________   ________
                                          ________   ________   ________

                                          $ 590.8    $ 449.6    $ 363.3
                                          =======    =======    =======

            Depreciation and Amortization
              Expense
            _____________________________

              Seed                        $  13.3    $  11.6    $  9.1<PAGE>





              Swine                           2.2        2.2       2.2
                                          ________   ________   ________

                                          $  15.5    $  13.8    $ 11.3

            Property Additions
            _____________________________

              Seed                        $  88.3    $  57.6    $  28.5
              Swine                           2.0        1.8        2.2
                                          ________   ________   ________

                                          $  90.3    $  59.4    $  30.7
                                          =======    =======    =======<PAGE>





          </TABLE>

            (1) Consolidated revenues do not include approximately $135
            million in fiscal year 1998, $155 million in fiscal year
            1997 and $145 million in fiscal year 1996 of DEKALB seed
            sold under royalty agreements with non-consolidated
            affiliates and licensees or recognized by equity companies.
            (Footnote P).<PAGE>





          <PAGE>

                             DEKALB GENETICS CORPORATION
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
          _________________________________________________________________


          S.DISCONTINUED OPERATIONS


           On April 28, 1995, the Company sold its poultry operations to
           Central Farm of America, Inc., an affiliate of Toshoku, Ltd.,
           for $12.5 million cash.  Accordingly, the poultry business is
           reported as a discontinued operation and the consolidated
           financial statements have been reclassified to report
           separately the net assets and operating results of the
           business.  The Company's operating results for prior years
           have been restated to reflect continuing operations.

           Net earnings from discontinued operations in fiscal 1995
           included an operating loss of $0.5 million, net of $0.5
           million tax benefit and a net gain on the sale of $1.7
           million, net of $0.5 million tax expense.  Revenues for
           discontinued operations were $12.1 million for the eight
           months of fiscal 1995.  Net assets of the discontinued
           operations at August 31, 1998 amounted to $0.2 million.<PAGE>





          <PAGE>
                             DEKALB Genetics Corporation
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued



          T.Monsanto Transaction


           On January 31, 1996, the Company entered into a series of
           agreements with Monsanto Company (Monsanto), including an
           agreement which provides for a long-term research and
           development collaboration with Monsanto in the field of
           agricultural biotechnology, particularly corn seed. DEKALB
           and Monsanto also entered into cross-licensing agreements
           covering insect-resistant and herbicide-tolerant corn
           products.  The two companies share the royalties received
           from third parties relating to the patents covered by such
           cross-licensing agreements.

           During the third quarter of fiscal 1996, DEKALB completed a
           sale of equity to Monsanto as part of an Investment
           Agreement.  The two-for-one stock split to shareholders of
           record on July 25, 1997, and the three-for-one stock split
           to shareholders of record on May 10, 1996 are reflected in
           the following share and price information.  During fiscal
           1996, Monsanto purchased from DEKALB 0.5 million newly
           issued shares of DEKALB Class A (voting) Common Stock at a
           price per share of $ 10.83 and 2.8 million newly issued
           shares of Class B (non-voting) Common Stock at a price per
           share of $10.83.  As a result of the new stock issued to
           Monsanto, the total number of outstanding shares of Common
           Stock of the Company rose to over 34.0 million from about
           31.2 million.

           During fiscal 1996, Monsanto also acquired 10.4 million
           shares of DEKALB's publicly traded Class B Common Stock in a
           separate cash tender offer at a price of $11.83 per share.
           Upon completion of the tender offer, Monsanto held 10
           percent of the Class A voting shares and approximately 43
           percent of the Class B non-voting shares.  As of August 31,
           1997, Monsanto held 0.5 million shares of Class A and 13.2
           million shares of Class B Common Stock.  This represents
           approximately 10 percent of Class A and 44 percent of Class
           B non-voting shares.  In accordance with the Investment
           Agreement, Monsanto acquired an additional 0.2 million
           shares of DEKALB's publicly traded Class B Common Stock at
           $40.38 per share during fiscal 1998.  As of August 31, 1998,
           Monsanto held 0.5 million shares of Class A and 13.3 million
           shares of Class B Common Stock representing approximately
           eleven percent of Class A voting shares and 44 percent of
           Class B non-voting shares.

           Additionally, DEKALB received $4.0 million from Monsanto in
           March, 1996, $3.0 million in February, 1997, $3.0 million in
           January, 1998, and $3.0 million in March, 1998.  These<PAGE>





           payments represent  the first four installments under the
           companies' collaboration agreement, which calls for total
           payments of $18.2 million over the term of the agreement.

           On May 11, 1998, DEKALB announced that it had entered into
           an Agreement with Monsanto Company providing for Monsanto to
           acquire all of the shares of DEKALB capital stock that it
           did not already own.  Pursuant to the agreement, on May
           15,1998, Monsanto commenced a cash tender offer for all of
           the common stock of DEKALB at $100 net per share.  The
           second step of the transaction will be a merger in which any
           remaining stock of DEKALB will be exchanged for cash at the
           same price per share paid in the tender offer.  If the
           tender offer is not completed by May 9, 1999, the offer
           price will increase by 50 cents per share on the tenth day
           of each month, starting on May 10.

           The tender offer is conditioned on the expiration of the
           Hart-Scott-Rodino Act waiting period and other customary
           conditions.  On June 3, 1998, DEKALB and Monsanto announced
           that they received requests for additional information and
           other documentary materials from the U.S. Department of
           Justice under the Hart-Scott-Rodino Act.  Monsanto is required
           to extend the tender offer pending satisfaction of the
           Hart-Scott-Rodino Act waiting period and the other conditions 
           to the offer, but in no event beyond November 9, 1999, unless 
           the offer is earlier terminated in accordance with the terms of 
           the merger agreement.<PAGE>

           As of November 30, 1998, Monsanto and the Antitrust Division of
           the U.S. Department of Justice have concluded extensive
           discussions regarding Monsanto's proposed acquisition of DEKALB
           Genetics Corporation.  Monsanto officials believe they have
           resolved all issues raised by the Division, and, as a result,
           intend to close the tender offer for the outstanding shares of
           DEKALB Class A and Class B Common Stock, in accordance with the
           terms previously announced.

           Monsanto's tender offer for all the outstanding shares of Class A
           and Class B Common Stock of DEKALB at a purchase price of $100 in
           cash per share expires at 5 p.m. ET, on Monday, November 30, 1998,
           unless extended.





          <PAGE>
          ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE
          _________________________________________________________________

                None.


                                      PART III

          ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
          ___________________________________________________________


          Set forth below is the name, age and principal occupation of each
                director of the Company for the past five years.

        <TABLE>
        CAPTION
<PAGE>





              Name and Principal Occupation        Age     Director Since


          <S>                                      <C>          <C>
          Dr. Charles J. Arntzen................    57     August 1, 1990

               Dr. Arntzen is President and
               Chief Executive Officer of the
               Boyce Thompson Institute for
               Plant Research, Inc.  He was
               Manager, Plant Biotechnology
               Program, Institute of Biosciences
               and Technology of Texas A & M
               University until he assumed his
               present position in August 1995.
               He also serves on the University
               of Chicago's Board of Governors
               for the Argonne National
               Laboratory. Dr. Arntzen is
               Chairman of the Audit Committee.

          Allan Aves............................    67    August 29, 1988

               Mr. Aves is a farmer and is a
               director of the Illinois Farm
               Bureau, the former President and
               a director of the DeKalb County
               Farm Bureau and the former
               President and Chairman of the
               Board of the American Soybean
               Association.  He is a member of
               the Audit Committee.

          Bruce P. Bickner......................    55     June 15, 1988

               Mr. Bickner is Chairman and Chief
               Executive Officer of the Company.
               He is a director of Castle
               BancGroup, Inc. and NICOR Inc.
               Mr. Bickner is a member of the
               Executive Committee.

          Dr. Robert T. Fraley..................    45     April 16, 1996

               Dr. Fraley is Co-President, Ag
               Sector of Monsanto, one of five
               sectors of Monsanto specializing
               in Life Sciences.  Until he
               assumed his present position in
               March 1997, he was President of
               Ceregen, a unit of Monsanto
               Company that develops chemical,
               biotechnology and seed products
               for agriculture.  He was Group
               Vice President and General
               Manager of the New Products<PAGE>





               Division of Monsanto Company
               until January 1995.  Dr. Fraley
               is a member of the Executive
               Committee.

          Tod R. Hamachek.......................    52

               Mr. Hamachek is Chairman and                                                            June 1, 1992
               Chief Executive Officer of
               Penwest Pharmaceuticals Co., a
               pharmaceutical company
               specializing in the development
               and distribution of drug delivery
               systems and inactive ingredients
               used to manufacture oral dose
               pharmaceutical tablets.  He was
               President and Chief Executive
               Officer of PENFORD Corporation
               until he assumed his present
               position in September 1998.  He
               is a director of PENFORD
               Corporation, Northwest Natural
               Gas Company and The Seattle Times
               Company.  Mr. Hamachek is a
               member of the Compensation
               Committee.
          Paul H.                                   62    October 13, 1992
          Hatfield..............................

               Mr. Hatfield is Chairman of
               Hatfield Capital Group, a private
               investment company.  He was
               Chairman, President and Chief
               Executive Officer of Petrolite
               Corporation from November 1995
               until July 1997.  He was Chairman
               of Hatfield Capital Group from
               February 1995 until November
               1995.  He was Vice-President of
               Ralston Purina Company and
               President and Chief Executive
               Officer of Protein Technologies
               International until February
               1995.  He is a director of
               PENFORD Corporation and Solutia
               Inc.  Mr, Hatfield is a member of
               the Audit Committee.

          Virginia Roberts Holt.................    43    January 16, 1996

               Mrs. Holt was President of
               Charles A. Lowe & Associates, an
               audiology practice, until May
               1997.

          Douglas C. Roberts....................    46    August 29, 1988<PAGE>






               Mr. Roberts is a Private
               Investor.  He held the position
               of Vice President, Strategic
               Projects of the Company from May
               1998 until July 1998 when he
               retired from the Company.  He was
               Vice President, Marketing of the
               Company from February until May
               1998.  He held the position of
               Director, U.S. Business Units of
               the Company's seed division until
               February 1995.  Mr. Roberts is a
               member of the Executive
               Committee.

          John T.Roberts........................    40      July 1, 1993

               Mr. Roberts is a Private
               Investor.  He was Chief Financial
               Officer and Treasurer of Quest
               Environmental Resources
               Corporation until July 1997.  Mr.
               Roberts is a member of the
               Compensation Committee.

          Richard O. Ryan......................     56     June 15, 1988

               Mr. Ryan is President and Chief
               Operating Officer of the Company.
               Mr. Ryan is a member of the
               Executive Committee.

          H. Blair White.......................     71    August 29, 1988

               Mr. White is Of Counsel to Sidley
               & Austin, a law firm that
               provides legal services to the
               Company. Mr. White is Chairman of
               the Compensation Committee and of
               the Executive Committee.

          William M.                                41    January 13, 1997
          Ziegler..............................

               Mr. Ziegler is Special Projects
               Director in the Ag Sector of
               Monsanto.  He was Special
               Projects Director of Ceregen, a
               unit of Monsanto that develops
               chemical, biotechnology and seed
               products for agriculture until he
               assumed his present position in
               March 1997.  He was Business
               Director, Corn and Soybeans of
               Ceregen until November 1996.<PAGE>





          /TABLE
<PAGE>





          <PAGE>

          The Merger Agreement provides that, promptly after the Purchaser
          purchases Shares pursuant to the Offer, the Purchaser will be
          entitled to designate up to such number of directors for the
          Company, rounded up to the next highest whole number, as will
          make the percentage of the Company's directors so designated by
          the Purchaser (the `Monsanto Designees') equal to the aggregate
          voting power of the shares of Class A Common Stock held by
          Monsanto or any of its subsidiaries.  The name, age and principal
          occupation of each of the individuals that Monsanto may select to
          be the Monsanto Designees has been previously mailed to all
          stockholders of the Company and filed by the Company with the
          Commission.

          The names, ages, and positions of the executive officers of the
          Company, with their business experience during the past five
          years, are shown below.  Corporate officers are elected annually
          by the Board of Directors.

                                                                     Age


          Bruce P. Bickner...........................................55
          Mr. Bickner is Chairman and Chief Executive Officer of the
          Company.  He is a director of Castle BancGroup, Inc. and
          NICOR, Inc.

          Richard T. Crowder.........................................59
          Mr. Crowder is Senior Vice President, International of the
          Company.  He was Executive Vice President and General
          Manager of Armour Swift Eckridge from July, 1992 until
          October, 1994 when he assumed his present position.

          Janis M. Felver............................................51
          Ms. Felver is Vice President and Chief Accounting Officer of
          the Company.  She was Controller and Chief Accounting
          Officer until she assumed her present postion in January
          1997.  She was Assistant Controller of the Company until
          January 1995.

          Catherine J. Mackey........................................43
          Ms. Mackey is Vice President, Research of the Company.  She
          served as Director, Discovery Research of the Company until
          September 1995.

          John H. Pfund..............................................51
          Mr. Pfund is Vice President, Research of the Company.  He
          was Research Director of the Company until he assumed his
          present position in September 1995.  He was Associate
          Director of Research of the Company until November 1994.

          Richard O. Ryan............................................56
          Mr. Ryan is President and Chief Operating Officer of the
          Company.<PAGE>





          John H. Witmer, Jr.........................................58
          Mr. Witmer is Senior Vice President, General Counsel and
          Secretary of the Company.

          Each officer of DEKALB has been elected to serve as such
          until the next annual election of officers of DEKALB or
          until his or her successor is elected.<PAGE>





          <PAGE>

            SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

          Directors and officers of the Company and persons having 10
          percent or more beneficial ownership of the Company's stock are
          required under Section 16 of the Securities Exchange Act of 1934
          to report to the Commission their transactions in, and beneficial
          ownership of, the Company's Class A Common Stock, Class B Common
          Stock and other equity securities of the Company.  Reports
          received by the Company during the last fiscal year indicate that
          Monsanto, an owner of at least 10 percent of the Company's stock,
          filed one late report relating to one transaction.<PAGE>













ITEM: 11  EXECUTIVE COMPENSATION

                   EXECUTIVE COMPENSATION
                 SUMMARY COMPENSATION TABLE

The following table sets forth current and long-term compensation for each of
the last three fiscal years of the Chief Executive Officer and each of the
other executive officers whose salary and bonus for the fiscal year 1998
exceeded the disclosure threshold established by the Commission (collectively,
the `Named Executive Officers'):<PAGE>

                                                                               
<TABLE>
                                                                                      Long Term
                                                        Annual Compensation          Compensation
                                                   ____________________________  ____________________
                  <S>                        <C>   <C>         <C>       <C>      <C>         <C>       <c
                    Name and                                              Other     Awards     Payouts
                  Principal Position                                      Annual
                  at August 31, 1998                                     Compen-   Number of               All Other
                                                                                  Securities   Perfor-   Compensation
                                             Year    Salary      Bonus    sation  Underlying    mance
                                                                                  Options(2)    Unit     (3)
                                                                           (1)                 Payouts



                  Bruce P. Bickner. . . . .  1998   $349,231   $ 67,865  $21,170    32,000     $     0   $43,439
                  Chairman and Chief         1997    328,654    341,250   17,448    30,000      93,800    65,160
                    Executive Officer        1996    294,231    379,688   11,140    28,200           0    52,346

                  Richard O. Ryan .  . . .   1998   $264,423   $ 42,750  $11,510    25,000     $     0   $26,089
                  President and Chief        1997    249,616    226,875   14,547    18,800      56,000    43,101
                    Operating Officer        1996    239,423    276,094    6,836    48,000           0    31,103

                  Richard T. Crowder  .. .   1998   $249,039   $202,500  $ 9,770    18,000     $     0   $26,545
                  Senior Vice President,     1997    224,615    192,500   10,120    13,600      17,500    34,869
                    International.           1996    214,635    136,000        0    42,000           0    25,253

                  John H. Witmer, Jr. . . .  1998   $170,000    $20,000   $9,055     7,000    $      0   $13,371
                  Senior Vice President      1997    169,809     78,375    5,200     6,000      23,800    20,621
                    & General Counsel        1996    164,080     77,125    1,235     6,000           0    15,992

                  Catherine J. Mackey . . .  1998   $158,269    $40,313  $10,670    12,000    $      0   $10,819
                  Vice President, Research   1997    139,616     54,375   11,041     8,000      15,400       170
                                             1996    129,127     65,000        0    18,600           0    12,716

</TABLE>

<TABLE>
          <S>  <C>
          (1)  Other Annual Compensation for fiscal 1998 arose from the following sources:  Taxable
               income for executive car participants (Mr. Bickner - $1,671, Mr. Ryan - $7,562, Mr.
               Crowder - $8,270, Ms. Mackey - $6,495); Personal use of company airplane (Mr.
               Bickner - $11,931, Mr. Ryan - $1,048, Mr. Witmer - $3,705); Financial Planning (Mr.
               Bickner - $4,800, Mr. Ryan - $2,900, Mr. Crowder - $1,500, Mr. Witmer - $5,350, Ms.
               Mackey - $4,175); and reimbursement to Mr. Bickner for income taxes related to
               benefit plan of $2,768.

          (2)  No restricted stock or stock appreciation rights (SARs) were awarded to the Named
                    Executive Officers during fiscal 1996, 1997 or 1998.


          (3)  All Other Compensation for fiscal 1998 arose from the following sources:  Company
                    contributions to the Company's Deferred Compensation Plan (Mr. Bickner -
                    $26,501, Mr. Ryan - $16,565, Mr. Crowder - $14,149, Mr. Witmer - $4,419 and Ms.
                    Mackey - $2,632); Company contributions to the Company's Savings and Investment
                    Plan (Mr. Bickner - $8,000, Mr. Ryan - $8,000, Mr. Crowder - $8,000, Mr. Witmer
                    - $8,000 and Ms. Mackey - $8,000); and reimbursement for life insurance
                    premiums (Mr. Bickner - $8,938, Mr. Ryan - $1,524, Mr. Crowder - $1,396, Mr.
                    Witmer - $952 and Ms. Mackey - $187); and Company payment to Mr. Crowder of
                    $3,000 for spouse international travel benefit.<PAGE>
<PAGE>

</TABLE>



          <PAGE>
                        STOCK OPTION DURING 1998 FISCAL YEAR

          The following table sets forth the number of shares of Class A
          Common Stock that were granted subject to options during fiscal
          1998 to each Named Executive Officer receiving such a grant:

          <TABLE>
          CAPTION
<PAGE>






                          Individual Grants

              <S>          <C>           <C>       <C>       <C>        <C>
                                     Percentage
                                         of
                        Number of       Total    Exerci
                       Securities      Shares       se    Expiratio    Grant
                       Underlying    Granted to   Price       n        Date
                         Options      Employees    Per
             Name      Granted(1)     in Fiscal   Share      Date     Present

                                        1998                           Value

                                                                      (2)(3)


          Bruce P.       32,000         14.1%     $26.69   01/20/08  $547,520
          Bickner

          Richard        25,000         11.0%     $26.69   01/20/08  $427,750
          O. Ryan

          Richard        18,000          7.9%     $26.69   01/20/08  $307,980
          T.
          Crowder

          John H.         7,000          3.1%     $26.69   01/20/08  $119,770
          Witmer,
          Jr.

          Catherine      12,000          5.3%     $26.69   01/20/08  $205,320
          J. Mackey<PAGE>





          </TABLE>
          (1)  These options to purchase Class A Common Stock of the
               Company were granted under the Company's Long-Term Incentive
               Plan (LTIP) at an exercise price of 100 percent of fair
               market value on the date of grant.  The options are
               exercisable over a period of not more than ten years from
               the date of grant.  The stock option grants were made
               effective January 20, 1998.  Vesting is over a three-year
               period from the date of grant, with one-third of the options
               vesting on January 20, 1999, one-third vesting on January
               20, 2000, and the final one-third vesting on January 20,
               2001.

          (2)  Grant date present value is based on a Black-Scholes option
               pricing model adapted for use in valuing executive stock
               options.  In calculating the grant present values set forth
               in the table, a factor of 40% has been assigned to the
               volatility of the common stock, the annual dividend
               assumption is $0.14 per share, the interest rate has been
               fixed at 8.00% and the exercise of options has been assumed
               to occur at the end of the actual option term of ten years.
               There is no assurance that these assumptions will prove to
               be true in the future.  Consequently, the actual value, if
               any, an executive may realize will depend on the common
               stock price on the date the option is exercised, so that
               there is no assurance the value realized by an executive
               will be at or near the value estimated by the Black-Scholes
               model.

          (3)  Upon the consummation of the Offer, any options then
               outstanding will be cancelled in consideration for a cash
               payment from the Company for each such option equal to (i)
               the product of (a) the number of Shares subject or related
               to such option and (b) the excess, if any, of the Offer
               Price over the per Share exercise price of such option,
               minus (ii) all applicable federal, state, and local
               withholding taxes.  See `Employment and Severance Agreements
               with Certain Executive Officers - Stock Options.'<PAGE>





          <PAGE>

          AGGREGATED OPTION EXERCISES DURING FISCAL 1998 AND FISCAL 1998
          YEAR-END
                                    OPTION VALUES

          The following table sets forth the number of shares of Class A
          and Class B Common Stock that were purchased pursuant to options
          exercised, and the number and value of shares subject to
          unexercised options at August 31, 1998, for each of the Named
          Executive Officers:
          <TABLE>
          CAPTION
<PAGE>





                                             Number of Securities        Value of Unexercised
                                            Underlying Unexercised           In-the-Money
                       Shares                  Options Held at                Options at
                      Acquired   Value        August 31, 1998(1)          August 31, 1998(2)
             Name        on     Realized  Exercisable  Unexercisable  Exercisable  Unexercisable

                      Exercise    (2)
          <S>         <C>         <C>       <C>           <C>         <C>            <C>

          Bruce P.      -0-       -0-       351,294       61,406      $29,178,357    $3,780,150
          Bickner

          Richard       -0-       -0-       200,364       53,436      $16,431,390    $3,451,930
          O. Ryan

          Richard       -0-       -0-        62,628       40,972       $4,914,098    $2,680,752
          T.
          Crowder

          John H.       -0-       -0-       120,600       13,000      $10,078,519    $  801,330
          Witmer,
          Jr.

          Catherine     -0-       -0-        41,502       23,498      $ 3,286,527    $1,503,183
          J. Mackey<PAGE>





          </TABLE>

          (1)  No employee of the Company holds any SARs relating to Class
               A or Class B Common Stock.

          (2)  Market value of underlying securities at exercise or year-
               end, minus the exercise price.  Market value is based on the
               $86.63 per share closing price on the New York Stock
               Exchange of the Class B Common Stock on August 31, 1998.<PAGE>






              ESTIMATED ANNUAL RETIREMENT BENEFITS FOR YEARS OF SERVICE

          The following table sets forth the estimated annual retirement
          benefits payable upon retirement pursuant to the Company's
          retirement plans for the indicated levels of remuneration and
          years of service for each Named Executive Officer:

                                  Years of Service

          <TABLE>
          <CAPTION>



            FINAL
           AVERAGE
          COMPENSAT         5        10          15        20
             ION
          <S>            <C>        <C>       <C>       <C>
           $150,000      $22,500    $45,000   $67,500    $90,000
           $175,000 $    $26,250    $52,500   $78,750   $105,000
           $200,000      $30,000    $60,000   $90,000   $120,000
           $225,000      $33,750    $67,500  $101,250   $135,000
           $250,000      $37,500    $75,000  $112,500   $150,000
           $275,000      $41,250    $82,500  $123,750   $165,000
           $300,000      $45,000    $90,000  $135,000   $180,000
           $325,000      $48,750    $97,500  $146,250   $195,000
           $350,000      $52,500   $105,000  $157,500   $210,000
           $375,000      $56,250   $112,500  $168,750   $225,000
           $400,000      $60,000   $120,000  $180,000   $240,000
           $425,000      $63,750   $127,500  $191,250   $255,000
           $450,000      $67,500   $135,000  $202,500   $270,000
           $475,000      $71,250   $142,500  $213,750   $285,000
           $500,000      $75,000   $150,000  $225,000   $300,000
           $525,000      $78,750   $157,500  $236,250   $315,000
           $550,000      $82,500   $165,000  $247,500   $330,000
           $575,000      $86,250   $172,500  $258,750   $345,000
           $600,000      $90,000   $180,000  $270,000   $360,000
           $625,000      $93,750   $187,500  $281,250   $375,000
           $650,000      $97,500   $195,000  $292,500   $390,000
           $675,000     $101,250   $202,500  $303,750   $405,000
           $700,000     $105,000   $210,000  $315,000   $420,000
           $725,000     $108,750   $217,500  $326,250   $435,000
           $750,000     $112,500   $225,000  $337,500   $450,000<PAGE>


          </TABLE>

               The credited years of service for each of the following
          Named Executive Officers is:

                    Bruce P. Bickner         20
                    Richard O. Ryan          16
                    John H. Witmer, Jr.      17
                    Catherine J. Mackey      12

          The benefits are calculated by determining the average annualized
          earnings (i.e., salary and bonus) of the applicable 36 months and
          multiplying this by the number of years of service (up to a
          maximum of 20 years) times three percent.  These benefits will be
          reduced by social security benefits, the benefit from the regular
          match of the defined contribution plan (starting on the date the
          defined benefit plan for executives was modified), qualified
          pension plan benefits and benefits from a profit sharing plan
          previously provided by the Company.  The benefit table assumes
          that the participant will retire at age 65.  If the participant
          retires at an earlier age, the benefit will be reduced by five
          percent for every year retirement takes place before age 65.

          Mr. Crowder is not eligible for the above retirement benefit.
          The Company has guaranteed that his annual retirement benefit
          starting at age 65 (from Social Security, the Company's qualified
          retirement plans (excluding<PAGE>





          <PAGE>

          the Company's 401(k) plan as it was in effect in September 1994)
          and the Company's non-qualified retirement plans) will equal or
          exceed an amount equal to two percent times his years of service
          times his average annual compensation during his last thirty-six
          months of employment.  At August 31, 1998, Mr. Crowder's years of
          credited service were three.


          EMPLOYMENT AND SEVERANCE AGREEMENTS WITH CERTAIN EXECUTIVE
          OFFICERS

          The Company has entered into written employment agreements with
          all of the Named Executive Officers.  Each employment agreement
          provides for a one-year term and is subject to successive one-
          year extensions unless notice of termination is given.  The
          employment agreements provide for the following base salaries for
          fiscal 1999 to be paid to the executive officers:  Mr. Bickner
          ($350,000), Mr. Ryan ($297,000), Mr. Crowder ($275,000), Mr.
          Witmer ($170,000), and Ms. Mackey ($172,000).  Those executive
          officers will have Company performance-related bonus
          opportunities which have been set for a target bonus of $350,000;
          $233,000; $150,000; $93,000; and $78,000 respectively, which
          could be exceeded if performance merits.  Each employment
          agreement provides that if the executive officer is terminated
          prior to the expiration of the term of the agreement, such
          executive officer will also be entitled to termination pay equal
          to 24 months' base salary and target bonus in the case of Messrs.
          Bickner, Ryan, and Crowder, 27 months' base salary and target
          bonus in the case of Ms. Mackey, 12 months' base salary and
          target bonus in the case of Mr. Witmer.  Each employment
          agreement also specifically states that the officer wil be
          entitled to receive Gross-Up Payments (as defined below) in
          respect of Excise Taxes (as defined below).  For a description of
          Excise Taxes and the Company's policy with respect to Gross-Up
          Payments generally, see `Parachute Payment Reimbursement Policy'
          below.  Messrs. Bickner, Ryan, Crowder, and Ms. Mackey are
          subject to noncompetition limitations for periods of time
          equaling the length of their termination pay and are also subject
          to nonsolicitation limitations for a period of three years
          following their termination

          Pursuant to the Merger Agreement, Monsanto has agreed to honor,
          or cause to be honored by the Company and its Subsidiaries, all
          employment agreements with the persons who are directors,
          officers and employees of the Company and its subsidiaries.

          Severance Pay Plan.  On May 5, 1998, the Board of Directors
          approved the DEKALB Genetics Corporation Severance Pay Plan,
          which provides severance benefits for each employee, including
          each executive officer, of the Company and its subsidiaries
          (excluding seasonal and temporary employees and employees of
          foreign subsidiaries of the Company) whose employment is<PAGE>





          terminated by the Company without `cause' (as such term is
          defined in the Merger Agreement) after the consummation of the
          Offer.  For employees of the Company who have five or more years
          of service with the Company, including all but one of its
          executive officers, such benefits include a lump sum cash payment
          equal to two weeks of `weekly compensation' (defined in such plan
          to include base salary and target bonus) for each year of
          service, but not more than 52, nor less than 20, weeks of weekly
          compensation (not less than 26 weeks in the case of employees
          with the title of president or vice president).  For employees
          with fewer than five years of service, including one executive
          officer, such benefits include a lump sum cash payment equal to
          16 weeks of weekly compensation (26 weeks in the case of
          employees with titles of president or vice president).  Each of
          the Named Executive Officers has a title of president or vice
          president.  In addition to such lump sum cash payment, each
          covered employee would be entitled to four weeks notice prior to
          any such termination of employment and to receive outplacement
          services commensurate with such employee's position.  Such plan
          also provides that it may not be amended for a period of 12
          months following consummation of the Offer.

          Parachute Payment Reimbursement Policy.  On May 5, 1998, the
          Board of Directors approved the DEKALB Genetics Corporation
          Policy and Procedure Regarding Reimbursement of Employees for
          Parachute Payment Taxes and Expenses.  Such policy and procedure
          provides that in the event it is determined that any payment or
          distribution by, or any other amount resulting from,
          compensation, benefits or any other remuneration provided by, the
          Company, the surviving corporation in the Merger or any of their
          subsidiaries to or for the benefit of any employee or former
          employee of the Company or any of its subsidiaries (which would
          include any person employed immediately before the consummation
          of the Offer) (a `Payment') is or will be subject to the excise
          tax imposed by Section 4999 of the Internal Revenue Code of 1986,
          as amended (the `Code'), or any interest or<PAGE>





          <PAGE>
          penalties or expenses (including any attorneys fees or other
          professional expenses incurred in challenging the application of
          any such tax) are incurred by such person with respect to such
          excise tax (such excise tax, together with any such interest and
          penalties and expenses, are hereinafter collectively referred to
          as the `Excise Tax'), then such person shall be entitled to
          receive from the Company or the surviving corporation in the
          Merger, an additional payment (a `Gross-Up Payment') in an amount
          such that after payment by such person of all taxes (including
          any interest or penalties imposed with respect to such taxes),
          including, without limitation, any income taxes (and any interest
          and penalties imposed with respect thereto) and Excise Tax
          imposed upon the Gross-Up Payment, such person retains an amount
          of the Gross-Up Payment equal to the expenses and the Excise Tax
          imposed upon the Payments.

          Special Contribution to Certain Retirement Plans.  On May 5,
          1998, the Board of Directors approved amendments to the DEKALB
          Genetics Corporation Savings and Investment Plan (the `401(k)
          Plan') and to the DEKALB Genetics Corporation Deferred
          Compensation Plan (the `Deferred Compensation Plan').  The effect
          of such amendments, among other things, is that the Company will
          make a special credit to the account of each employee of the
          Company, including each of its executive officers, who is
          eligible to participate in the 401(k) Plan on the date of the
          consummation of the Offer and on the date which is 120 days
          following the consummation of the Offer or whose employment is
          terminated by the Company without `cause' (as defined in the
          Merger Agreement) during such 120-day period.  Each credit will
          be made to the employee's 401(k) Plan account to the extent
          permitted by the 401(k) Plan and applicable regulations and to
          the extent not permitted thereby will, in the case of certain
          management and highly compensated employees, be made to the
          Deferred Compensation Plan.  The amount of each credit will be
          equal to two percent of the employee's `compensation' (defined in
          the 401(k) Plan to include, among other things, base salary and
          bonus) for the plan year in which such 120-day anniversary of the
          consummation of the Offer or such earlier termination occurs and,
          to the extent that such employee was not employed by the Company
          for such entire plan year, such credit will be equal to two
          percent of the compensation that the employee would have earned
          had such employee been employed by the Company for such entire
          plan year, subject, in the case of the 401(k) Plan, to the terms
          thereof and applicable regulations.  Such credits to the 401(k)
          Plan will be accompanied by Company contributions of like
          amounts.

          Stock Options.  The Long-Term Incentive Plan Administrative
          Committee of the Board of Directors has taken action in
          accordance with the terms of the DEKALB Genetics Corporation
          Long-Term Incentive Plan to accelerate the exercisability of
          options granted thereunder which are not yet exercisable,
          including options granted to executive officers of the Company,<PAGE>





          so that all such options will be exercisable immediately prior to
          the consummation of the Offer.  In addition, the Board of
          Directors has taken action to provide that, upon consummation of
          the Offer, all unexercised options granted under such plan and
          all unexercised options granted to directors under the DEKALB
          Genetics Corporation Director Stock Option Plan, including
          options granted to directors thereunder which are unexercisable
          at that time, will be cancelled in consideration for a cash
          payment from the Company for each such option equal to (i) the
          product of (a) the number of Shares subject or related to such
          option and (b) the excess of the Offer Price over the per Share
          exercise price of such option, minus (ii) all applicable federal,
          state and local withholding taxes.

          Vesting of Benefits.  On May 5, 1998, the Board of Directors
          approved amendments to the DEKALB Genetics Corporation Pension
          Plan (the `Pension Plan'), the DEKALB Genetics Corporation
          Executive Retirement Plan (the `Executive Retirement Plan'), the
          401(k) Plan and the Deferred Compensation Plan which provide,
          among other things, that the employees, including the executive
          officers, of the Company participating in such plans will become
          fully vested in their benefits thereunder.  Such vesting will
          occur under the Pension Plan, the Executive Retirement Plan and
          the Deferred Compensation Plan upon the consummation of the Offer
          and under the 401(k) Plan on the date which is 120 days
          thereafter, provided that the participant is then employed or the
          employment of such participant has been terminated without cause
          after the consummation of the Offer and prior to the date which
          is 120 days thereafter.  In addition, the amendment to the
          Executive Retirement Plan deleted a provision thereof requiring
          the forfeiture of a participant's benefits upon the termination
          of such participant's employment by the Company for cause.

          Retiree Health Benefits.  On May 5, 1998, the Board of Directors
          approved the DEKALB Genetics Corporation Retiree Health Care Plan
          (the `Retiree Health Care Plan') which guarantees that medical
          benefits provided by the Company, together with those provided by
          the health care plan operated by the Employees' Mutual Welfare<PAGE>





          <PAGE>
          Association (the `EMWA Plan'), to former or current employees who
          are, or within the 12-month period following the consummation of
          the Offer become, eligible to receive such benefits under the
          EMWA Plan as retirees (including those who would be eligible but
          for not having terminated employment), and to certain other
          current and former employees of the Company, including in each
          case executive officers of the Company, and the dependents of
          such former and current employees, will continue to be provided
          at least generally at the same level of benefits as provided by
          the EMWA Plan as of the date of adoption of the Retiree Health
          Care Plan.

                              COMPENSATION OF DIRECTORS

          Director who are not employees of the Company or nominees of
          Monsanto pursuant to the Invesment Agreement, dated as of January
          31, 1996, by and between Monsanto and the Company (the
          `Investment Agreement'), are paid $14,000 annually, plus $1,000
          per day for attending meetings at the request of the Board of
          Directors, meetings of committees fo the Board of Directors, or
          other meetings at the request of the Company, plus expenses for
          attending such meetings.  An additional fee of $1,000 annually is
          paid to each of the Chairmen of the Eecutive, Audit and
          Compensation Committees. Monsanto Designees will not be
          compensated for services as directors of the Company but will be
          entitled to reimbursement of their expenses.

          Pursuant to the DEKALB Genetics Corporation Director Stock Option
          Plan (the `Director Plan'), directors who are not officers or
          employees of the Company or nominees of Monsanto may elect to
          receive options to purchase shares of Class A Common Stock of the
          Company in lieu of cash compensation (`Director Options').  The
          number of shares of Class A Common Stock subject to each Director
          Option shall be equal to the nearest number of whole shares
          determined by dividing the amount of the Annual Retainer and
          Meeting Fees by 25 percent of the Fair Market Value (as defined
          below) of a share of Class A Common Stock on the date of the
          annual meeting of stockholders of the Company.  For purposes of
          the Director Plan, the `Annual Retainer' is equal to the amount
          the director will be entitled to receive for serving as a
          director in the relevant year and the 'Meeting Fees' are equal to
          the amounts the director will be entitled to receive for
          attendance at all regularly scheduled meetings of the Board of
          Directors or any committee of the Board of Directors of which he
          is a member in the relevant year.  If a director does not attend
          such a Board of Directors or committee meeting (including
          non-attendance because any meeting was not held), the director
          will forfeit that portion of the Director Options related to the
          Meeting Fees for that meeting.  The per share exercise price of
          the Class A Common Stock subject to each Director Option will be
          75 percent of the Fair Market Value of a share of Class A Common
          Stock on the date prior to the date such Director Option was
          granted.  Under the Director Plan, the `Fair Market Value' of a<PAGE>





          share of Class A Common Stock is the last price per share at
          which a share of the Company's Class B Common Stock is sold in
          the regular way on the New York Stock Exchange on the day prior
          to the day each Director Option is granted, or, in the absence of
          any reported sales on such day, the first preceding day on which
          there were such sales.

             COMPENSATION COMMITTEE INTELOCKS AND INSIDER PARTICIPATION


          H. Blair White, a director of the Company, is Of Counsel to the
          law firm of Sidley & Austin. Sidley & Austin provided legal
          services to the Company during the past year.



          ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                   MANAGEMENT

                         SECURITY OWNERSHIP OF MANAGEMENT
          The following table sets forth as of October 30, 1998 the
          beneficial ownership of the Class A and Class B Common Stock of
          the Company (including shares as to which a right to acquire
          ownership exists (e.g., through the exercise of stock options)
          within the meaning of Rule 13d-3(d)(1) under the Securities
          Exchange Act of 1934) of each director and director nominee, each
          Named Executive Officer (as defined below) and all directors and
          executive officers as a group.<PAGE>





          <PAGE>
          <TABLE>
          <CAPTION>


                                       Number of Shares of Common Stock Owned
                                     Beneficially and Percentages of Each Class
                                         Outstanding on October 30, 1998 (1)



          <S>                             <C>           <C>        <C>     <C>
                                        Class A           %      Class B     %


          Dr. Charles J. Arntzen(2)         38,985        0.854        -       -
          Allan Aves(3)                     82,877        1.799        -       -
          Bruce P. Bickner(4)              365,088        7.486        -       -
          Richard T. Crowder(5)             62,533        1.363        -       -
          Dr. Robert T. Fraley(17)               -            -        -       -
          Tod R. Hamachek(6)                49,654        1.085        -       -
          Paul H. Hatfield(7)               65,018        1.416        -       -
          Virginia Roberts               2,753,369         (16)   65,020   0.216
          Holt(8)(9)(17)
          Catherine J. Mackey (10)          41,467        0.908        -       -
          Douglas C.                     2,753,369         (16)   71,870   0.239
          Roberts(9)(11)(17)
          John T.                        2,753,369         (16)   57,446   0.191
          Roberts(9)(12)(17)
          Richard O. Ryan(13)              209,386        4.431   25,100   0.083
          H. Blair White                    61,942        1.369        -       -
          John H. Witmer, Jr.(14)          123,600        2.660        -       -
          William M. Ziegler(17)                 -            -        -       -
           All of the above and all
           other executive officers
           as a group    (17         3,769,604(16)   66.566(16)  219,736   0.730
           persons)(15)<PAGE>





          </TABLE>
          (1)  The Securities and Exchange Commission defines the
               beneficial owner of a security as including any person who
               has sole or shared voting or investment power with respect
               to such security.  Unless otherwise noted, the named
               individual has sole voting and investment power with respect
               to the shares of Class A (voting) Common Stock and sole
               investment power with respect to the shares of Class B (non-
               voting) Common Stock listed.

          (2)  39,258 shares of Class A Common Stock subject to options
               which may be acquired on or prior to December 29, 1998.

          (3)  Includes 81,977 shares of Class A Common Stock subject to
               options which may be acquired on or prior to December 29,
               1998.

          (4)  Includes 351,300 shares of Class A Common Stock subject to
               options which may be acquired on or prior to December 29,
               1998.  79,300 of such shares subject to options are held in
               a family limited partnership in which Mr. Bickner is the
               general partner and 13,988 shares of Class A Common Stock
               are held in the Bickner Family Foundation in which Mr.
               Bickner is the president.

          (5)  62,533 shares of Class A Common Stock subject to options
               which may be acquired on or prior to December 29, 1998.

          (6)  49,654 shares of Class A Common Stock subject to options
               which may be acquired on or prior to December 29, 1998.

          (7)  65,018 shares of Class A Common Stock subject to options
               which may be acquired on or prior to December 29, 1998.

          (8)  The number of shares of Class A Common Stock reported
               represents (i) 2,671,650 shares of Class A Common Stock held
               pursuant to a Voting Trust Agreement of which Virginia
               Roberts Holt is a Voting<PAGE>





          <PAGE>
               Trustee, plus (ii) 81,719 shares of Class A Common Stock
               subject to options granted to Virginia Roberts Holt, Douglas
               C. Roberts or John T. Roberts which may be acquired on or
               prior to December 29, 1998 (12,950 of which shares relate to
               options granted to Virginia Roberts Holt).  All of such
               shares are also reported in this table as being beneficially
               owned by Douglas C. Roberts and John T. Roberts.  Of the
               2,671,650 shares of Class A Common Stock held pursuant to
               the Voting Trust Agreement, 860,216 shares are represented
               by a Trust Certificate held by Virginia Roberts Holt.
               Included are 443,184 shares of Class A Common Stock which
               (together with 52,760 shares of Class B Common Stock) are
               held in trusts for the benefit of the children of Virginia
               Roberts Holt of which she or her spouse is the trustee.  The
               provisions of such Voting Trust Agreement and related
               agreements are described under `Certain Shareholder
               Agreements' under Item 13.  The shares of Class B Common
               Stock listed above include 7,570 shares of Class B Common
               Stock held by her spouse.

          (9)  Douglas C. Roberts, John T. Roberts and Virginia Roberts
               Holt are brothers and sister.

          (10) 41,467 shares of Class A Common Stock subject to options
               which may be acquired on or prior to December 29, 1998.

          (11) The number of shares of Class A Common Stock reported
               represents (i) 2,671,650 shares of Class A Common Stock held
               pursuant to a Voting Trust Agreement of which Douglas C.
               Roberts is a Voting Trustee, plus (ii) 81,719 shares of
               Class A Common Stock subject to options granted to Virginia
               Roberts Holt, Douglas C. Roberts or John T. Roberts which
               may be acquired on or prior to December 29, 1998 (23,933 of
               which shares relate to options granted to Douglas C.
               Roberts).  All of such shares are also reported in this
               table as being beneficially owned by Virginia Roberts Holt
               and John T. Roberts.  Of the 2,671,650 shares of Class A
               Common Stock held pursuant to the Voting Trust Agreement,
               836,322 shares are represented by a Trust Certificate held
               by Douglas C. Roberts.  Included are 135,708 shares of Class
               A Common Stock which (together with 19,902 shares of Class B
               Common Stock) are held in trusts for the benefit of the
               children of Douglas C. Roberts of which he or his spouse is
               the trustee.  The provisions of such Voting Trust Agreement
               and related agreements are described under `Certain
               Shareholder Agreements' under Item 13.  The shares of Class
               B Common Stock listed above include 3,370 shares of Class B
               Common Stock held by his spouse.

          (12) The number of shares of Class A Common Stock reported
               represents (i) 2,671,650 shares of Class A Common Stock held
               pursuant to a Voting Trust Agreement of which John T.
               Roberts is a Voting Trustee, plus (ii) 81,719 shares of<PAGE>





               Class A Common Stock subject to options granted to Virginia
               Roberts Holt, Douglas C. Roberts or John T. Roberts which
               may be acquired on or prior to December 29, 1998 (44,836 of
               which shares relate to options granted to John T. Roberts).
               All of such shares are also reported in this table as being
               beneficially owned by Virginia Roberts Holt and Douglas C.
               Roberts.  Of the 2,671,650 shares of Class A Common Stock
               held pursuant to the Voting Trust Agreement, 846,678 shares
               are represented by a Trust Certificate held by John T.
               Roberts.  Included are 312,194 shares of Class A Common
               Stock which (together with 42,306 shares of Class B Common
               Stock) are held in trusts for the benefit of the children of
               John T. Roberts of which he or his spouse is the trustee.
               The provisions of such Voting Trust Agreement and related
               agreements are described under `Certain Shareholder
               Agreements' under Item 13.  The shares of Class B Common
               Stock listed above include 7,570 shares of Class B Common
               Stock held by his spouse.

          (13) Includes 200,267 shares of Class A Common Stock subject to
               options which may be acquired on or prior to December 29,
               1998.  7,200 shares of Class A Common Stock and 25,100
               shares of Class B Common Stock are held in the S. Orville
               Ryan Family Foundation of which Mr. Ryan is the President.

          (14) Includes 120,600 shares of Class A Common Stock subject to
               options which may be acquired on or prior to December 29,
               1998.

          (15) Includes 1,137,639 shares of Class A Common Stock subject to
               options which may be acquired on or before December 29,
               1998.<PAGE>





          <PAGE>
          (16) As shown in footnotes 8, 11 and 12 and as described under
               `Certain Shareholder Agreements' under Item 13, Douglas C.
               Roberts, John T. Roberts and Virginia Roberts Holt share
               voting power with respect to 2,671,650 shares of Class A
               Common Stock.  Accordingly, such shares (which represent
               59.038% of the outstanding shares of Class A Common Stock on
               October 30, 1998) are accounted for in this table at three
               different places.  So that the actual impact of their
               ownership can be better understood, such multiple counting
               has been eliminated in the total number reported as
               beneficially owned by all directors and executive officers.
               The dispositive power and economic benefits of each of them
               with respect to such shares, as a percent of the total
               outstanding shares of Class A Common Stock, is Douglas C.
               Roberts (18.910%), John T. Roberts (19.507%) and Virginia
               Roberts Holt (19.240%).

          (17) Mssrs. Fraley and Ziegler are employees of Monsanto.  By
               virtue of the 1998 Stockholders Agreement described under
               `Certain Shareholder Agreements: under Item 13, Monsanto may
               be deemed to be the beneficial owner of 2,671,650 shares of
               the Class A Common Stock beneficially owned by Douglas C.
               Roberts, John T. Roberts and Virginia Roberts Holt. Monsanto
               disclaims beneficial ownership of any shares of Class A
               Common Stock beneficially owned by Douglas C. Roberts, John
               T. Roberts and Virginia Roberts Holt relating to options to
               purchase such shares.  For purposes of this filing, Mssrs.
               Fraley and Ziegler expressly disclaim beneficial ownership
               of any shares of Class A Common Stock beneficially owned by
               Monsanto.<PAGE>





          <PAGE>
                   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

          The following table sets forth as of October 30, 1998 the
          beneficial ownership of the Company's Class A Common Stock of
          each person known by the Company to own beneficially more than
          five percent of such class of securities and the percentage of
          all shares of Class A Common Stock that such number of shares
          represents:
          <TABLE>
          CAPTION
<PAGE>





                                                         Percentage of
                                                          Outstanding
                                                           Shares of
                                         Shares Owned       Class A
                Name and Address         Beneficially    Common Stock

                                              (1)

          <S>                                 <C>             <C>
          John T. Roberts
          Virginia Roberts Holt
          Douglas C. Roberts
          Charles C. Roberts
          Mary R. Roberts
             c/o Douglas C. Roberts      2,753,369(2)       59.764%
                 P.O. Box 218
                 Sycamore, IL  60178

          Monsanto Corporation (3)          485,442         10.727%
               800 North Lindbergh
               Blvd.
               St. Louis, Missouri
               63167

          Bruce P. Bickner (4)              365,088         7.486%
               11702 Deerpath Road
               Sycamore, Illinois 60178<PAGE>





          </TABLE>


          (1)  The Securities and Exchange Commission defines the
               beneficial owner of a security as including any person who
               has sole or shared voting or investment power with respect
               to such security.

          (2)  Charles C. Roberts and Mary R. Roberts are husband and wife
               and are the father and mother of John T. Roberts, Virginia
               Roberts Holt and Douglas C. Roberts.  The shares reported
               represent shares held pursuant to a Voting Trust Agreement
               of which each of them is a Voting Trustee, plus shares
               subject to options held by them, which shares may be
               acquired on or prior to December 29, 1998.  See Notes 8, 11
               and 12 under `SECURITY OWNERSHIP OF MANAGEMENT.'  The
               provisions of such Voting Trust Agreement and related
               agreements are described under `Certain Shareholder
               Agreements.'

          (3)  By virtue of the 1998 Stockholders Agreement described under
               `Certain Shareholder Agreements' under Item 13, Monsanto may
               be deemed to be the beneficial owner of 2,671,650 shares of
               Class A Common Stock beneficially owned by Douglas C.
               Roberts, John T. Roberts and Virginia Roberts Holt.  Without
               considering such shares, Monsanto beneficially owns 485,442
               shares of Class A Common Stock representing 10.727% of the
               shares of Class A Common Stock outstanding as of October 30,
               1998. Monsanto disclaims beneficial ownership of any shares
               of Class A Common Stock beneficially owned by Douglas C.
               Roberts, John T. Roberts and Virginia Roberts Holt relating
               to options to purchase such shares.  The provisions of the
               1998 Stockholders Agreement are described in `Certain
               Shareholder Agreements' under Item 13

          (4)  See Note 4 under `SECURITY OWNERSHIP OF MANAGEMENT.'<PAGE>





          <PAGE>
          ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



                                CERTAIN TRANSACTIONS

          On May 8, 1998, the Company entered into the Merger Agreement
          with Monsanto and the Purchaser, pursuant to which, among other
          things, the Purchaser commenced the Offer to acquire all of the
          Class A Common Stock and all of the Class B Common Stock of the
          Company for the Offer Price per Share.  The Merger Agreement
          further provides that following the consummation of the Offer and
          the satisfaction or waiver of certain conditions, the Purchaser
          will be merged with and into the Company with the Company
          continuing as the surviving corporation.  As of the effective
          time of the Merger each issued and outstanding Share (other than
          Shares owned by the Company, Monsanto, the Purchaser or their
          respective subsidiaries, which Shares will be canceled and other
          than Shares, if any, held by stockholders who are entitled to and
          who properly exercise appraisal rights under Delaware law), will,
          by virtue of the Merger and without any action by the holder
          thereof, be converted into the right to receive from the
          surviving corporation in cash the price per Share paid in the
          Offer.

          On January 31, 1996, the Company entered into a series of
          agreements with Monsanto, including an Investment Agreement and a
          collaboration agreement which provides for a long-term research
          and development collaboration with Monsanto in the field of
          agricultural biotechnology, particularly corn seed.  The Company
          and Monsanto also entered into cross-licensing agreements
          covering insect-resistant and herbicide-tolerant corn products
          targeted to reach the market over the next few years.

          The Investment Agreement provides that if the Company issues new
          shares of its Class A Common Stock or Class B Common Stock
          pursuant to any of the Company's employee benefit plans, Monsanto
          may purchase from the Company a sufficient number of shares to
          maintain its permitted percentage ownership of Class A Common
          Stock and Class B Common Stock.  During the second quarter of
          fiscal 1997 and the first quarter of fiscal 1998, the Company
          completed two sales of equity to Monsanto pursuant to such
          provisions. Monsanto purchased from the Company 24,102 (after
          taking into account the two-for-one stock split that was made to
          shareholders of record on July 25, 1997) and 156,024 newly issued
          shares of Class B Common Stock at aggregate prices of $590,725
          and $6,299,957 respectively.  As provided in the Investment
          Agreement, the price for the shares was based upon a specified
          twenty-day average closing price on the applicable securities
          exchange for the Class B Common Stock.

          The collaboration agreement between the Company and Monsanto has
          an initial term of ten years and includes a series of cash<PAGE>





          payments from Monsanto to the Company originally aggregating
          $19,500,000 over the initial term.  In 1998, the collaboration
          agreement was amended to accelerate the payments into earlier
          years and to reduce the aggregate amount to $18,500,000.  The
          amendment did not materially change the net present value of the
          payments, however.  During fiscal 1998, Monsanto paid $6,000,000
          to the Company under the collaboration agreement.

          As part of the cross license agreements entered into between
          Monsanto and the Company, each party has an obligation to share
          with the other certain royalties and technology fees it receives
          that are related to seed corn that contains the applicable insect
          resistance or herbicide tolerance.  The Company estimates a net
          payment from Monsanto of approximately $3,300,000 under the
          licenses for sales during fiscal 1998.

          The Company sold soybean products for which the Company collected
          a royalty or technology fee on behalf of Monsanto from the
          ultimate purchaser of the products, but was not entitled to share
          the net proceeds with Monsanto.  For sales during fiscal 1998,
          the Company paid Monsanto approximately $11,000,000 for such
          products, net of certain service fees the Company was permitted
          to retain.  The Company and subsidiaries of Monsanto also
          purchased germplasm, seed and specialty corn products from each
          other.  The Company paid Monsanto a net of approximately
          $1,800,000 as a result thereof.  The Company believes that the
          terms of each of the agreements pursuant to which such payments
          were made were at least comparable to the terms Monsanto and the
          Company provided to other seed companies, as the case may be.

          Also, in an effort to increase available supplies of certain
          seeds to farmers in fiscal 1998, Monsanto paid to the Company
          approximately $5,750,000 to help cover the Company's incremental
          winter production costs.<PAGE>





          <PAGE>

                           CERTAIN SHAREHOLDER AGREEMENTS

          The following describes certain provision of (i) a Voting Trust
          Agreement (the `Voting Trust Agreement') among each of Douglas C.
          Roberts, Virginia Roberts Holt, John T. Roberts, Charles C.
          Roberts and Mary R. Roberts (the `Voting Trustees'), individually
          and as trustees of trusts created for the benefit of their
          spouses or children (the Voting Trustees and such trust being
          referred to as the `Shareholders'), (ii) a Roberts Family
          Shareholder Agreement among the Shareholders, (iii) a
          Stockholders' Agreement (the `Monsanto Stockholders' Agreement')
          among the Shareholders and Monsanto and (iv) a Stockholders
          Agreement (the `1998 Stockholders Agreement') among Monsanto and
          the Shareholders entered into in connection with Merger
          Agreement.  The following descriptions are only a summary of
          certain provisions of such agreements and are qualified in their
          entirety by reference to the agreements themselves which are
          incorporated herein by reference and a copy or form of which has
          been filed with the Commission.

          VOTING TRUST AGREEMENT

          Pursuant to the terms of the Voting Trust Agreement, the shares
          of Class A Common Stock listed above under `Security Ownership of
          Management' as being beneficially owned by the Voting Trustees
          were transferred to the Voting Trustees for deposit pursuant to
          the Voting Trust Agreement, and the Voting Trustees issued trust
          certificates (`Trust Certificates') in respect of such shares.
          The Voting Trust Agreement provides that any Shareholder who
          subsequently acquires any shares of Class A Common Stock of the
          Company will deposit such shares with the Voting Trustees to be
          held pursuant to the Voting Trust Agreement (any shares deposited
          with the Voting Trustees pursuant to the Voting Trust Agreement
          are referred to as `Subject Shares').

          The Voting Trust Agreement provides that the Voting Trustees have
          full right and power to vote all Subject Shares upon all matters
          submitted to a vote or consent of shareholders of the Company and
          that the Voting Trustees will vote all Subject Shares as a unit
          in accordance with the determination of a majority of the Voting
          Trustees, except that with respect to the Investment Agreement
          Matters (as defined herein under `__ Monsanto Stockholders'
          Agreement') or business combinations (as defined in the Monsanto
          Stockholders' Agreement) involving the Company (`Company Business
          Combinations'), the Voting Trustees will vote in accordance with
          the instructions of holders of Trust Certificates or, if no
          instructions are given, in accordance with the recommendation of
          the Board of Directors of the Company.

          All dividends or distributions upon the Subject Shares will be
          paid by the Voting Trustees to the holders of Trust Certificates
          ratably based on the number of Subject Shares reflected on the<PAGE>





          Trust Certificates except that any dividend or distribution of
          voting stock of the Company will be deposited pursuant to the
          Voting Trust Agreement.

          The Voting Trustees have no power to sell or otherwise dispose of
          any Subject Shares, except that the Voting Trustees are required
          to tender or exchange Subject Shares in accordance with the terms
          of any tender or exchange offer if (i) the Voting Trustees are so
          instructed by the holder of the Trust Certificate for such
          Subject Shares and (ii) such tender or exchange offer, if
          consumated, would result in the beneficial ownership by a group
          or person of all of the shares of Class A and Class B Common
          Stock and the Company has previously published its position or
          recommendation with respect to such tender or exchange offer
          pursuant to applicable rules under the Securities Exchange Act of
          1934 (any such tender or exchange offer pursuant to applicable
          rules under the Securities Exchange Act of 1934 (any such tender
          or exchange offer described in this clause (ii) being referred to
          as a `Qualifying Tender Offer').

          The Voting Trust Agreement will terminate with repect to any
          Subject Share on the earliest to occur of (i) the withdrawal of
          such Subject Shares in accordance with the provisions of the
          Roberts Family Shareholder Agreement, (ii) the written agreement
          of all Voting Trustees and (iii) when the voting of such Subject
          Share ceases to be vested in the Voting Trustees.

          ROBERTS FAMILY SHAREHOLDER AGREEMENT<PAGE>





          <PAGE>
          The Roberts Family Shareholder Agreement provides that no
          Shareholder will sell, withdraw from the Voting Trust Agreement
          or otherwise dispose of any interest in Subject Shares, except as
          provided in the Roberts Family Shareholder Agreement.  Each
          Shareholder has agreed not to sell, convey, transfer, assign or
          otherwise dispose of (`transfer') any interest in any Class A
          Common Stock or other voting common or voting preferred stock of
          the Company, any option, warrant or other right to acquire Class
          A Common Stock or such other voting stock (collectively, `Company
          Voting Stock'), unless such Shareholder has withdrawn the Subject
          Shares from the Voting Trust Agreement after compliance with the
          procedures described in the following paragraph.

          Any Shareholder desiring to withdraw Subject Shares from the
          Voting Trust Agreement must give written notice to the other
          Shareholders, each of whom will then have an option to purchase
          his or her pro rata portion of such Subject Shares at a market
          price based on a thirty day average of the daily closing prices
          for the Class B Common Stock on the New York Stock Exchange (or,
          if there is no such daily market price, an appraised value for
          such Subject Shares).  If such other Shareholders have not
          elected to acquire all of such Subject Shares, then each
          Shareholder who elected to acquire Subject Shares will have a
          further option to purchase his or her pro rata portion of the
          Subject Shares which such other Shareholders have not elected to
          acquire.  Any Subject Shares not acquired by such other
          Shareholders after such further option may be withdrawn from the
          Voting Trust Agreement and will no longer be subject to the
          Roberts Family Shareholder Agreement.

          The Roberts Family Shareholder Agreement provides that the
          restrictions on transfer therein will not apply to certain
          permitted transfers (`Permitted Transfers') specified therein,
          including (i) certain pledges of Company Voting Stock, (ii) a
          transfer of Company Voting Stock to other Shareholders or their
          spouses, descendants or certain other trusts or other entities,
          (iii) any exchange, conversion or transfer of Company Voting
          Stock in connection with a Company Business Combination, other
          than any agreement to transfer prior to the Company's execution
          of an agreement with respect to such Company Business Combination
          or (iv) any tender or exchange in accordance with the terms of a
          Qualifying Tender Offer.

          The Roberts Family Shareholder Agreement will terminate on
          January 31, 2006.

          MONSANTO SHAREHOLDERS' AGREEEMENT

          The Monsanto Stockholders' Agreement was entered into in
          connection with a series of agreemnts between the Company and
          Monsanto described above under `Certain Transactions,' including
          the Investment Agreement.<PAGE>





          The Investment Agreement provides, among other things, that (i)
          Monsanto was entitled to nominate one member to the Company's
          Board of Directors (pursuant to such provision Robert T. Fraley
          was appointed to the Board on April 16, 1996) and that Monsanto
          could nominate for election at the Company's 1997 annual meeting
          of stockholders, an additional member (pursuant to such provision
          Wiliam M. Ziegler was elected) to the Company's Board (any such
          nominee or nominees being referred to as `Monsanto Nominees'),
          (ii) the By-Laws of the Company were amended to (a) state that
          the primary business of the Company is the research-based
          production, marketing, licensing and sale of agronomic seed,
          including both technology related thereto and products derived
          therefrom, (b) state that the use of voting securities by the
          Company to facilitate strategic collaborations is in the
          Company's best interests (but as to any one strategic
          collaboration the maximum amount of voting securities of the
          Company to be issued to any individual, entity or group will not
          exceed 10% of the voting securities of the Company then
          outstanding) and (c) prohibit the Company from acquiring any
          business or assets outside of such primary business that would
          constitute a substantial part (as defined in the Investment
          Agreement) of the Company provided that such By-Law amendments
          permit the Company to change its primary business, issue voting
          securities to facilitate a strategic collaboration or acquire any
          business outside of such primary business unless three of the
          members of the Board vote against the resolution relating to such
          change or transaction (such By-Law provisions described in this
          clause (ii) being referred to as the `By-Law Provisions') and
          (iii) while Monsanto beneficially owns either 5% of the Class A
          Common Stock or 20% of the Class B Common Stock, if the Company
          proposes to issue for cash (subject to specified limitations) any
          shares of Common Stock, securities convertible into such shares
          or options, warrants or rights to acquire such shares (`Equity'),
          Monsanto will have the right to purchase all or any portion of
          its pro rata share of such Equity on the terms set forth in the
          Investment Agreement (the provisions described in this clause
          (iii) being referred to as the `Equity Purchase Provisions' and
          the provisions described in clauses (i), (ii) and (iii) being
          referred to as the `Investment Agreement Matters').<PAGE>





          <PAGE>
          Pursuant to the Merger Agreement, the Comapny has agreed that the
          By-Law Provisions will be eliminated in their entirety
          immediately upon the acquisition of Shares in the Offer.

          The Monsanto Stockholders' Agreement provides that each
          Shareholder will use best efforts to attend each stockholder
          meeting for purposes of establishing a quorum and will vote all
          of its shares of any voting stock of the Company (`Voting Stock')
          in favor of any Monsanto Nominee recommended by the Board of
          Directors of the Company provided that such Monsanto Nominee is
          reasonably satisfactory to the Company.  In addition, the
          Monsanto Stockholders' Agreement provides that each Shareholder
          will not, without the consent of Monsanto initiate any action
          what would result in the amendment of the By-Law Provisions and
          that each Shareholder will vote its Voting Stock in favor of any
          proposed amendment to the Company's certificate of incorporation
          to increase the Comany's authorized capital stock, which
          amendment is required in order for the Company to comply with the
          Equity Purchase Provisions.

          The Monsanto Stockholders' Agreement provides that except for
          certain permitted transfers, no Shareholder may transfer any
          interest in its Voting Stock except as provided by the Monsanto
          Stockholders' Agreement, and that, with limited exceptions, no
          Shareholder will convert any Class A Common Stock to Class B
          Common Stock until such time as such Shareholder has entered into
          a binding agreement to sell or convey such Class B Common Stock
          to a third party.

          If any Shareholder desires to transfer any interest in its Voting
          Stock (other than certain permitted transfers) such Shareholder
          will make a written offer to Monsanto (a `Shareholder Offer') to
          purchase such Voting Stock and Monsanto will have the option to
          purchase all but not less than all of such Voting Stock for the
          price and upon the terms upon which such Shareholder proposes to
          transfer such Voting Stock. If Monsanto rejects the Shareholder
          Offer, Monsanto has the exclusive right for a period of time to
          propose alternative terms for such purchase. If Monsanto does not
          accept the Shareholder Offer and Monsanto and such Shareholder
          have not otherwise reached an agreement regarding such purchase
          within such time period, then such Shareholder may offer and sell
          such Voting Stock to any person or entity on terms that are at
          least as favorable to such Shareholder as those set forth in the
          Shareholder Offer or those offered by Monsanto in any
          counteroffer.

          In the event of any involuntary transfer of any Voting Stock
          (other than certain permitted transfers), Monsanto will have an
          exclusive option to purchase all but not less than all of the
          Voting Stock subject to the involuntary transfer in cash at a
          purchase price (i) based on a thirty day average of the daily
          closing prices for the Class B Common Stock on the New York Stock
          Exchange or (ii) if the Voting Stock is not Class A Common Stock<PAGE>





          or if the Class B Common Stock is not publicly traded, based on
          the fair market value thereof determined by an investment banking
          firm.

          The Monsanto Stockholders' Agreement is effective until the
          earlier of (i) the termination of the collaboration agreement
          entered into between the Company and Monsanto (except if it is
          terminated by reason of a material breach thereof by the Company
          or by reason of a governmental decree caused by voluntary action
          of the Company), (ii) Monsanto owning less than 5% of the
          outstanding Class A Common Stock or less than 50% of the highest
          percent of the outstanding Common Stock beneficially owned by
          Monsanto after completion of any purchases in the market of Class
          B Common Stock by Monsanto as permitted under the Investment
          Agreement during the one year period after the March 8, 1996
          closing under the Investment Agreement (the `Closing'), (iii) the
          termination of the Investment Agreement or (iv) the eleventh
          anniversary of the Closing or any subsequent anniversary of such
          Closing upon notice by Monsanto or a majority in interest of the
          Voting Stock by persons who are then Shareholders.

          1998 STOCKHOLDERS AGREEMENT

          Concurrently with the execution and delivery of the Merger
          Agreement, and as a condition to Monsanto's willingness to enter
          into the Merger Agreement, Monsanto and the Shareholders entered
          into the 1998 Stockholders Agreement with the Voting Trustees,
          individually and in his or her capacity as such Voting Trustee
          under the Voting Trust Agreement, and the registered holders of
          trust certificates, individually and in his or her capacity as
          such registered holder  (the `Registered Holders').<PAGE>





          <PAGE>
          Voting and Tender.  Contemporaneously with the execution and
          delivery of the 1998 Stockholders Agreement, each Registered
          Holder provided certain written instructions to the Voting
          Trustees (the `Voting and Tendering Instructions'). The Voting
          and Tendering Instructions instruct the Voting Trustees, in
          accordance with the provisions of the Voting Trust Agreement, to
          take the following actions on behalf of the Registered Holders:
          (a) at any duly noticed meeting of the stockholders of the
          Company called to vote upon the Merger Agreement and the
          transactions contemplated thereby or at any adjournment thereof
          (or in any other circumstances under which a vote, consent or
          approval with respect to the Merger Agreement and the
          transactions contemplated thereby is sought), to vote all of the
          2,671,650 Shares of Class A Common Stock held of record by the
          Voting Trustees pursuant to the Voting Trust Agreement (the
          `Voting Trust Shares') in favor of the approval and adoption of
          the Merger Agreement and the transactions contemplated thereby;
          (b) to be present (in person or by proxy) at any duly noticed
          meeting of the stockholders of the Company or at any adjournment
          thereof (or in any other circumstances under which vote, consent
          to approval is sought) with respect to any Business Combination
          (as such term is defined in the 1998 Stockholders Agreement)
          other than the Merger and to vote (or cause to be voted) all of
          the Voting Trust Shares against any such Business Combination;
          and (c) to tender as soon as practicable (and in any event not
          later than two business days prior to the first scheduled
          expiration date of the Offer) all of the Voting Trust Shares
          pursuant to the Offer and not to withdraw such tendered shares.
          The Voting and Tendering Instructions are irrevocable.

          Pursuant to the 1998 Stockholders Agreement, the Voting Trustees
          and Registered Holders have agreed, among other things, that so
          long as the 1998 Stockholders Agreement is in effect, the Voting
          Trustees will cast such votes, consents or other approvals and
          take or cause such actions in accordance with the Voting and
          Tendering Instructions. In addition, pursuant to the 1998
          Stockholders Agreement, the Voting Trustees have agreed not to
          take any action inconsistent with the Voting and Tendering
          Instructions, and each Registered Holder has agreed not to take
          any action that would amend or nullify the Voting and Tendering
          Instructions or in any way restrict or limit the performance of
          such Registered Holder's obligations under the 1998 Stockholders
          Agreement or the consummation of the transactions contemplated by
          the Merger Agreement.

          The 1998 Stockholders Agreement further provides for, among other
          things, during the term of the 1998 Stockholders Agreement: (i)
          restrictions on the transfer of any Voting Trust Shares or the
          taking of certain actions with respect to such Voting Trust
          Shares, other than pursuant to the Offer, the Merger or the 1998
          Stockholders Agreement; (ii) the prompt deposit of Shares
          acquired upon exercise of options held by certain of the
          Registered Holders (the `Voting Trust Option Shares') into the<PAGE>





          trust governed by the Voting Trust Agreement such that,
          thereafter, the Voting Trust Option Shares shall be deemed Voting
          Trust Shares for purposes of the 1998 Stockholders Agreement;
          (iii) with respect to certain other agreements governing the
          relationship among the Voting Trustees and the Registered Holders
          (as such agreements are collectively defined in the 1998
          Stockholders Agreement, the `Family Shareholder Agreements'),
          further assurances by the Voting Trustees and the Registered
          Holders to amend the Family Shareholder Agreements to the extent
          necessary (and not to otherwise amend such Family Shareholder
          Agreements) so that each Registered Holder and Voting Trustee can
          fully perform its obligations under the 1998 Stockholders
          Agreement; and (iv) the taking of certain actions by the Voting
          Trustees and Registered Holders in order to effectuate the terms
          of the 1998 Stockholders Agreement. The 1998 Stockholders
          Agreement also provides, among other things, for the making of
          certain representations by each of the Registered Holders, the
          Voting Trustees and Monsanto.

          Irrevocable Proxy.  The Voting Trustees have also granted to
          Monsanto an irrevocable proxy to vote the Voting Trust Shares in
          favor of the adoption of the Merger Agreement and the
          transactions contemplated thereby and against (i) actions or
          proposals that could reasonably be expected to result in (x) any
          material breach of the Merger Agreement or (y) any of the closing
          conditions set forth in the Merger Agreement not being fulfilled,
          (ii) any Business Combination (other than the Merger and the
          transactions contemplated by the Merger Agreement) and (iii)
          other extraordinary corporate transactions which would prevent or
          delay the Merger or the transactions contemplated by the Merger
          Agreement.

          No Solicitation.  The Voting Trustees and the Registered Holders
          have agreed in the 1998 Stockholders Agreement not to (a)
          solicit, initiate or knowingly encourage the submission of any
          Takeover Proposal (as such term is defined in the 1998
          Stockholders Agreement) or (b) participate in any discussions or
          negotiations<PAGE>





          <PAGE>
          regarding, or furnish to any person information with respect to,
          or take any action that could reasonably be expected to lead to,
          any Takeover Proposal.

          Termination.  The 1998 Stockholders Agreement will terminate at
          the effective time of the Merger. In addition, the 1998
          Stockholders Agreement may be terminated: (a) by mutual written
          consent of Monsanto and a majority of the Voting Trustees; (b) by
          Monsanto if (i) the Merger Agreement has terminated in accordance
          with its terms or (ii) in the event that (x) any of the
          representations and warranties of the Voting Trustees or the
          Registered Holders in the 1998 Stockholders Agreement shall not
          be true and correct in all material respects or (y) any of the
          Voting Trustees or the Registered Holders shall have failed to
          perform in any material respect any material covenant to be
          performed by any Voting Trustee or Registered Holder under the
          1998 Stockholders Agreement and in the case of (x) or (y) such
          untruth or incorrectness or such failure cannot be or has not
          been cured within thirty days after notice thereof; or (c) by a
          majority of the Voting Trustees, if none of the Voting Trustees
          or Registered Holders are in violation of their respective
          obligations under the 1998 Stockholders Agreement and (i)
          Monsanto or the Purchaser shall not have completed payment for
          all Shares tendered pursuant to the Offer and not withdrawn by
          the Outside Date (as defined in the Merger Agreement) for the
          Offer pursuant to the Merger Agreement, (ii) in the event that
          (x) any of the representations and warranties of Monsanto in the
          1998 Stockholders Agreement shall not be true and correct in all
          material respects or (y) Monsanto shall have failed to perform in
          any material respect any material covenant to be performed by it
          under the 1998 Stockholders Agreement and in the case of (x) or
          (y) such untruth or incorrectness or such failure cannot be or
          has not been cured within thirty days after notice thereof, (iii)
          subject to the compliance by the Company with its obligations
          under the best efforts provisions of the Merger Agreement, any
          Governmental Entity (as defined in the Merger Agreement) has
          issued an order enjoining or prohibiting the Offer or the
          consummation of the transactions contemplated by the 1998
          Stockholders Agreement or the Merger Agreement and such order has
          become final and nonappealable, and (iv) the Merger Agreement has
          terminated in accordance with its terms.



                                       PART IV

          ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON

                FORM 8-K


          (a) (1)
          Financial<PAGE>





             Statements
                           The following financial statements of
                           DEKALB Genetics Corporation are
                           included in Part II, Item 8:

                                                                   Page


                           Report of Independent Public             17
                           Accountants

                           Consolidated Statements of Operations
                           for the years ended August 31, 1998,     18
                           1997 and 1996

                           Consolidated Balance Sheets at August    19
                           31, 1998 and 1997

                           Consolidated Statements of Cash Flows
                           for the years ended August 31, 1998,     20
                           1997 and 1996

                           Consolidated Statements of
                           Shareholders' Equity for the years       21
                           ended August 31, 1998, 1997 and 1996

                           Notes to Consolidated Financial         22-43
                           Statements

          (a) (2)
          Financial
             Statement
             Schedules
                           Schedule VIII - Valuation and            68
                           Qualifying Account<PAGE>





          <PAGE>
                                       PART IV

             (a) (3)                                               Page
            Exhibits


               2A        Agreement and Plan of Merger dated as of   *
                         May 8, 1998 among Monsanto, the
                         Purchaser and the Company [Incorporated
                         by reference to Exhibit 1 to the
                         Company's Schedule 14D-9 as filed with
                         the Commission on May 15, 1998 (the
                         `1998 Schedule 14D-9')]

               2B        Stockholders Agreement dated as of May     *
                         8, 1998 between Monsanto and certain
                         stockholders of the Company.
                         [Incorporated by reference to Exhibit 2
                         to the 1998 Schedule 14D-9]

               3A        Restated Certificate of Incorporation of   *
                         DEKALB Genetics Corporation
                         [Incorporated by reference to Exhibit 3A
                         to Form 10-K filed October 10, 1997
                         (File No. 0-17005)]

               3B        By-Laws of DEKALB Genetics Corporation     *
                         [Attached as Exhibit B to Information
                         Statement contained in Form 8 Amendment
                         (Amendment No. 3) dated August 18, 1988,
                         amending Form 10 Registration Statement
                         of the Company dated June 17, 1988 (File
                         No. 0-17005)]

               4A        Form of Class A Common Stock Certificate   *
                         [Incorporated by reference to Exhibit 4A
                         to Form 8 Amendment (Amendment No. 1)
                         dated August 3, 1988, amending Form 10
                         Registration Statement of the Company
                         dated June 17, 1988 (File No. 0-17005)]

               4B        Form of Class B Common Stock Certificate   *
                         [Incorporated by reference to Exhibit 4B
                         to Form 8 Amendment (Amendment No. 1)
                         dated August 3, 1988, amending Form 10
                         Registration Statement of the Company
                         dated June 17, 1988 (File No. 0-17005)

               4C        Revolving Credit Agreement between
                         DEKALB Genetics Corporation and the        *
                         banks listed therein.  [Incorporated by
                         reference to Exhibit 4C to Form 10-K
                         filed October 10, 1997 (File No. 0-<PAGE>





                         17005)]

                         Other instruments with respect to long-
                         term debt of the Registrant are not
                         filed because the total amount of
                         securities authorized under each such
                         instrument does not exceed 10% of the
                         total assets of the Registrant and its
                         subsidiaries on a consolidated basis and
                         the Company agrees to provide a copy to
                         the Commission upon request.

               10A       DEKALB Genetics Corporation Long-Term      *
                         Incentive Plan [Incorporated by
                         reference to Exhibit 4A to Form S-8
                         Registration Statement No. 33-24875]**

               10B       Form of Indemnification Agreements         *
                         [Attached as Exhibit D to Information
                         Statement contained in Form 8 Amendment
                         (Amendment No. 3) Dated August 18, 1988,
                         amending Form 10 Registration Statement
                         of the Company dated June 17, 1988 (File
                         No. 0-17005)]**

               10C       DEKALB Genetics Corporation Savings and    *
                         Investment Plan [Incorporated by
                         reference to Exhibit 4.3 to Form S-8
                         (File No. 33-33305) dated February 1,
                         1990]**<PAGE>





          <PAGE>

          (a) (3)
          Exhibits                                                 Page
              continued

               10D       DEKALB Genetics Corporation Pension        *
                         Plan**

               10E       Form of Long-Term Incentive Plan           *
                         Agreement [Incorporated by reference to
                         Exhibit 4B to Form S-8 Registration
                         Statement (Registration No. 33-24875)]**

               10F       Director Stock Option Plan                 *
                         [Incorporated by reference to Exhibit
                         4.3 to Form S-8 Registration Statement
                         (Registration No. 33-39986)]**

               10G       Employment Agreement between DEKALB        *
                         Genetics Corporation and Bruce P.
                         Bickner dated September 1, 1994
                         [Incorporated by reference to Exhibit
                         10a to Form 10-Q filed April 12, 1995
                         (File No. 0-17005)]**

               10H       Employment Agreement between DEKALB        *
                         Genetics Corporation and Richard O. Ryan
                         dated September 1, 1994 [Incorporated by
                         reference to exhibit 10B to Form 10-Q
                         filed April 12, 1995 (File No. 0-
                         17005)]**

               10I       Employment Agreement between DEKALB        *
                         Genetics Corporation and John H. Witmer,
                         Jr. dated September 1, 1994
                         [Incorporated by reference to Exhibit
                         10C to Form 10-Q filed April 12, 1995
                         (File No. 0-17005)]**

               10J       Employment Agreement between DEKALB        *
                         Genetics Corporation and Richard T.
                         Crowder dated October 26, 1994
                         [Incorporated by reference to Exhibit
                         10J to Form 10-K filed October 12, 1995
                         (File No. 0-17005)]**

               10K       Employment Agreement between DEKALB
                         Genetics Corporation and Catherine        69-
                         Mackey dated September 1, 1997             71

               10L       DEKALB Genetics Corporation Retiree        *
                         Health Care Plan.  [Incorporated by
                         reference to Exhibit 4 to the 1998<PAGE>





                         Schedule 14D-9]**

               10M       DEKALB Genetics Corporation Severance      *
                         Pay Plan.  [Incorporated by reference to
                         Exhibit 5 to the 1998 Schedule 14D-9]**

               10N       DEKALB Genetics Corporation Policy and     *
                         Procedure Regarding Reimbursement of
                         Employees for Parachute Payment Taxes
                         and Expenses.  [Incorporated by
                         reference to Exhibit 6 to the 1998
                         Schedule 14D-9]**

               10O       Fifth Amendment to the DEKALB Genetics     *
                         Corporation Savings and Investment Plan.
                         [Incorporated by reference to Exhibit 7
                         to the 1998 Schedule 14D-9]**

               10P       Second Amendment to the DEKALB Genetics    *
                         Corporation Deferred Compensation Plan.
                         [Incorporated by reference to Exhibit 8
                         to the 1998 Schedule 14D-9]**

               10Q       Second Amendment to the DEKALB Genetics    *
                         Corporation Pension Plan.  [Incorporated
                         by reference to Exhibit 9 to the 1998
                         Schedule 14D-9]**

               10R       Second Amendment to the DEKALB Genetics    *
                         Executive Retirement Plan.
                         [Incorporated by reference to Exhibit 10
                         to the 1998 Schedule 14D-9]**<PAGE>





          <PAGE>

          (a) (3)
          Exhibits                                                 Page
              continued

               11        Computation of Earnings Per Share          72

               21        Subsidiaries of DEKALB Genetics            73
                         Corporation

               23        Consent of Independent Public              74
                         Accountants - Arthur Andersen LLP

               27        Financial Data Schedule

                *        Document has heretofore been filed with
                         the Commission and is incorporated by
                         reference.

               **        Document is a management contract or
                         compensating plan or arrangement.

          (b)            Reports on Form 8-K - No Form 8-K was
                         filed during the three months ended
                         August 31, 1998.<PAGE>





          <PAGE>
                                     SIGNATURES

          Pursuant to the requirements of Section 13 or 15 (d) of the
          Securities Exchange Act of 1934, the registrant has duly caused
          this report to be signed on its behalf by the undersigned,
          thereunto duly authorized.

                                               DEKALB GENETICS CORPORATION


          Date: November 30, 1998              By: Bruce P. Bickner      
                                                   Bruce P. Bickner
                                                   Chairman, Chief
                                                   Executive Officer
                                                   and Director


          Pursuant to the requirements of the Securities Exchange Act of
          1934, this report has been signed below by the following persons
          on behalf of the registrant and in the capacities on this 30th
          day of November, 1998.


                Signature                         Title

             Richard O. Ryan                      President, Chief 

             Richard O. Ryan                      Operating Officer 
                                                  and Director


             Janis M. Felver                      Vice President and

             Janis M. Felver                      Chief Accounting Officer



                                      DIRECTORS



             Charles J. Arntzen                   Allan Aves             
             Charles J. Arntzen                   Allan Aves


             Robert T. Fraley                     Tod R. Hamachek     
             Robert T. Fraley                     Tod R. Hamachek





             Paul H. Hatfield                     Virginia R. Holt  
             Paul H. Hatfield                     Virginia R. Holt




             Douglas C. Roberts                   John T. Roberts 
             Douglas C. Roberts                   John T. Roberts


             H. Blair White   
             H. Blair White                       William M. Ziegler





          <PAGE>
          <TABLE>
            
                             DEKALB Genetics Corporation
                   SCHEDULE VIII - VALUATION and QUALIFYING ACCOUNT
                      years ended August 31, 1998, 1997 and 1996
                                (Dollars in thousands)
          <CAPTION>
                Column A            Column B             Column C            Column D      Column E


                                                        Additions

          <S>                      <C>          <C>           <C>            <C>

                                   Balance at    Charged to    Charged to                   Balance
                                   Beginning     Costs and       Other                         at
          Description              of Period      Expenses      Accounts     Deductions       End
                                                                                               Of
                                                                                             Period


          Year ended August 31,
          1998:
          Deducted in the
          balance sheet
           from the assets to
          which they
           apply:                  $5,294       $ 2,550       $         0    $ 546 (a)      $ 7,298

             Allowance for
          doubtful accounts
              and notes
          receivable




             Inventory reserve     $18,878      $21,622       $         0    $ 8,679        $31,821




          Year ended August 31,
          1997:
          Deducted in the
          balance sheet
           from the assets to
          which they
           apply:                  $ 3,581      $ 2,761       $         0    $ 1,048 (a)    $ 5,294

             Allowance for
          doubtful accounts
             and notes<PAGE>





          receivable




             Inventory reserve     $13,915      $11,825       $         0    $ 6,862        $18,878




          Year ended August 31,
          1996:
          Deducted in the
          balance sheet
           from the assets to
          which they
           apply:                  $ 2,713      $ 1,233         $ 0          $    365       $ 3,581
                                                                              (a)
             Allowance for
          doubtful accounts
             and notes
          receivable




             Inventory reserve     $14,342      $7,379           $0          $7,806         $13,915<PAGE>








          Notes:
            (a) Uncollectible items written off, less recoveries of items
          previously written off.<PAGE>





          /TABLE
<PAGE>





          <PAGE>
                                     EXHIBIT 10K
            Employment Agreement between DEKALB Genetics Corporation and
                                     Catherine Mackey


          1. This Agreement is effective September 1, 1997 and shall
              remain in effect until August 31, 1998 unless extended as
              provided in Paragraph 3.

          2  Employee is Catherine J. Mackey.  The Company is DEKALB
             Genetics Corporation and its subsidiaries and affiliates.

          3. Employee shall be employed by the Company until the
             anniversary of the effective date of this Agreement and until
             each subsequent anniversary of such effective date except
             that either Employee or the Company may terminate such
             employment as of any particular such anniversary by providing
             the other party written notice thereof prior to such
             anniversary.

          4. Employee shall work for the Company in an executive capacity.

          5. Employee shall perform the duties assigned by the Company
             (`Duties') at such locations(s) as the Company reasonably
             requires.

          6. Employee shall devote full efforts during normal business
             hours to Duties, and the Company shall receive all of the
             benefits related to Duties.

          7. Employee's annual compensation is described in Exhibit A.  If
             the Exhibit is not updated prior to an anniversary date, the
             terms of the Exhibit shall continue until a new written
             Exhibit is agreed to by the parties.

          8. If Employee dies or becomes disabled and cannot perform
             Employee's Duties with reasonable accommodation, Employee or
             employee's estate shall receive an annual performance bonus
             equal to the target annual performance bonus in effect at the
             Employee's death or date of disability, prorated for the
             portion of the year up to the date of such death or
             disability.

          9. The Company will pay Employee's travel and other business
             expenses, consistent with company policies and as supported
             by appropriate documentation.

          10.Other than in the normal course of Duties with the Company,
             Employee will not at any time, during or after employment by
             the Company, disclose any non-public information relating to
             the Company.  Employee agrees to treat as confidential all
             such information, whether written or otherwise, including but
             not limited to, information regarding financial reports,<PAGE>





             employees, customers, products, costs, prices, services,
             research programs, patents, equipment, systems, production
             procedures, operations, potential acquisitions, new location
             plans, prospective and executed contracts and other business
             arrangements.

          11.Upon termination of employment, Employee will return to the
             Company all assets and all books, records, lists and other
             written materials, including information in computers or
             computer disks, whether furnished by the Company or prepared
             by the Employee, which contain any information relating to
             the Company's business.

          12.Employee shall make full and prompt written disclosure to the
             Company of any business opportunity of which Employee becomes
             aware and which relates to the business of the Company.

          13.All inventions, discoveries, ideas, improvements and designs
             made or conceived by Employee, and copyrights to all
             software, writings or other materials prepared by Employee,
             in each case solely or with others, while employed by the
             Company, during or after working hours, which are related to
             the actual or anticipated business of the Company, belong
             exclusively to the Company.  Employee shall make full and<PAGE>





             <PAGE>
             prompt written disclosure to the Company of the above.  At
             the request and expense of the Company, either before or
             after termination of employment, Employee shall execute a
             written assignment of and shall assist in acquiring and
             maintaining patent or other proprietary information
             protection of the Company's rights to such inventions, ideas,
             improvements, designs or copyrights.

          14.For three years after employment, Employee will not, in any
             way or capacity, solicit any officer, director, employee or
             other individual who is affiliated with the Company:

             A.   to leave employment or any position with the Company,

             B.   to compete with the business of the Company, or

             C.   to violate the terms of any agreement with the Company.

          15.For 18 months following termination of Employee's employment
             with Company for any reason whatsoever, Employee will not, in
             any way or capacity, participate in or have any employment,
             consultant, financial, management or other interest in any
             business enterprise anywhere that engages in or plans to
             engage in (either at the time of Employee's termination
             and/or during the 18-month period following such termination)
             significant or substantial competition with any business
             conducted by the Company involving the producing,
             distributing or marketing of hybrid or specialized
             agricultural seeds or conducting or administering any
             research activities relating to hybrid or specialized
             agricultural seeds.

          16.During the period set forth in paragraph 15, the Company
             shall (except in the case of Employee's termination on
             account of death or inability to perform Duties due to
             disability) and without regard to other amounts payable under
             this agreement pay Employee one-twelfth of Employee's annual
             base salary and one-twelfth of employee's target annual
             performance bonus (both at the rate in effect on Employee's
             termination date) for every one month during the period set
             forth in paragraph 15.  The Company shall not, however, be
             obligated to make such payments during any period of time
             that Employee is in breach of paragraph 15 of this Agreement.
             Notwithstanding the foregoing, in the event the Company
             terminates the Employee without cause, the payments due each
             month under this paragraph shall increase by fifty percent.
             Paragraphs 15 and 16 of this Agreement shall remain in effect
             throughout Employee's employment by the Company without
             regard to whether this Agreement is otherwise terminated at
             an earlier date.

          17.Payments by the Company to Employee pursuant to paragraph 16
             shall be in addition to the Company's severance policy under<PAGE>





             change of control.  Payments pursuant to paragraph 16 shall
             not, however, be in lieu of any compensation due Employee for
             Company's breach of this Agreement (e.g. the Company'
             obligation to make salary and bonus payments in the event of
             the Company's termination of Employee without cause during
             the term of this Agreement or any annual extension thereof).
             The Company agrees to be liable for, reimburse Employee for,
             and advance Employee amounts for taxes required to be paid by
             Employee under Section 4999 of the Internal Revenue Code of
             1986, as amended, due to compensation, fringe benefits and
             other remuneration provided by the Company to the Employee
             (`Remuneration'), and any interest and penalties with respect
             to such taxes (such taxes, interest and penalties, `Excise
             Tax') and to provide the Employee with an additional payment
             (a `Gross-Up Payment') in an amount such that after payment
             by the Employee of all taxes (including any interest or
             penalty imposed with respect to such taxes), including
             without limitation any income taxes (and any interest and
             penalties imposed with respect thereto) and Excise Tax
             imposed upon the Gross-Up Payment, the Employee retains an
             amount of the Gross-Up Payment equal to the Excise Tax
             imposed upon the Remuneration.  The Company agrees to pay all
             such amounts pursuant to, and all other amounts with respect
             thereto provided by and pursuant to, the terms of the
             Company's policies and procedures in effect at the time of
             the change of ownership or effective control of the Company
             pursuant to which such Excise Tax may become payable.

          18.Employee agrees that (a) both the duration and geographic
             scope of paragraph 15 are necessary to reasonably and
             adequately protect the Company's businesses, and (b) the
             compensation provided in paragraph 16 will adequately
             compensate Employee during transition to new employment or
             other status.<PAGE>





          <PAGE>
          19.Employee will not begin employment with another employer
             without first giving at least thirty days notice to the
             Company.  Prior to accepting any new employment, Employee
             shall inform his new employer of the existence of this
             Agreement and provide a copy hereof to such new employer.

          20.Except as otherwise provided in this Agreement, Employee's
             rights under any employee benefit plan shall not be affected
             by this Agreement.

          21.Employee has received a copy of both the DEKALB Antitrust
             Compliance Policy and the DEKALB Business Conduct Standards.
             Employee will adhere to the policies and principles contained
             therein, and will require all employees reporting to Employee
             to adhere to those policies and principles.

          22.The Company shall have the right, at its own expense and for
             its own benefit, to take out life insurance on Employee in
             such amount or amounts as it shall see fit, and Employee
             agrees to cooperate with the Company in obtaining such
             insurance.

          23.The Beneficiary Designation form attached hereto as Exhibit B
             is a part of this Agreement.  In the event of Employee's
             death when no beneficiary designation is in effect, the
             Company shall make payment of any amounts to which Employee
             was entitled to Employee's personal representative, heirs,
             devisees or legatees.  Employee may change Exhibit B at any
             time, by provided an amended version to the Personnel
             Department.

          24.Without limiting the rights of the Company to pursue all
             other legal and equitable rights available to the Company, it
             is agreed that:  (a) the Duties performed by Employee are of
             a special, unique, unusual and extraordinary character which
             give them a peculiar value, and the loss of such performance
             cannot be reasonably and adequately compensated in damages in
             an action at law, and (b) remedies other than injunctive
             relief cannot fully compensate the Company for violation of
             Paragraphs 10 through 19, of this Agreement; accordingly, the
             Company shall be entitled to injunctive relief to prevent
             violations of such paragraphs or continuing violations
             thereof.  All of Employee's and Company's covenants in and
             obligations under Paragraphs 10 through 19, this Agreement
             shall continue in effect notwithstanding termination of
             Employee's employment under any circumstances whatsoever.

          25.If in any proceeding a term, geographic or other restriction,
             covenant or promise contained herein is found to be
             unreasonable, unlawful or otherwise invalid and for that
             reason unenforceable, then such term, geographic or other
             restriction, covenant or promise shall automatically be<PAGE>





             deemed modified to the extent necessary to make it
             enforceable.

          26.This Agreement shall be binding upon the company, its
             successors and assigns and upon Employee, Employee's heirs,
             executors and administrators.  This Agreement may be assigned
             by the Company or transferred by operation of law.  Employee
             agrees that if the Company is sold or Employee is transferred
             to a subsidiary or affiliate, or from one subsidiary or
             affiliate to another, all terms and conditions of this
             Agreement shall remain in force as if it initially had been
             made with that purchaser, subsidiary or affiliate.

          27.Notices contemplated by this Agreement shall be effective
             when delivered in writing to the Company at 3100 Sycamore
             Road, DeKalb, IL  60115, ATTN:  General Counsel or to
             Employee at 62 Maritime Drive, Mystic, CT or 14-1 Matson
             Ridge, Old Lyme, CT  06371.

          28.This Agreement, including Exhibits A, B and C as they may be
             amended from time to time, all confidentiality agreements and
             all invention assignment agreements signed by Employee during
             any employment with the Company, contain the entire agreement
             between the parties hereto with respect to the transactions
             contemplated herein; together they supersede all prior
             negotiations and other agreements, both oral and written,
             between the parties and they cannot be modified except by an
             instrument in writing signed by both parties.<PAGE>





          <PAGE>
          <TABLE>
          CAPTION
<PAGE>


                                            EXHIBIT 11
                                   DEKALB Genetics Corporation
                          STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
                            years ended August 31, 1998, 1997 and 1996
                         (Dollars in thousands except per share amounts)


         <S>                            <C>              <C>               <C>
                                             1998             1997              1996


         BASIC EARNINGS PER SHARE:

            Average shares                  34,577,265        34,250,522       32,515,743
         outstanding*

            Net earnings for basic
         earnings per share
             computation                $       10,328    $       28,781    $      17,025




            Basic earnings per share*         $   0.30          $   0.84         $   0.52







         DILUTED EARNINGS PER SHARE:

            Average shares                  34,577,265        34,250,522       32,515,743
         outstanding*

            Net average additional
         shares outstanding
             assuming dilutive options
         exercised
             and proceeds used to
         purchase treasury
             stock at average market         1,787,502         1,493,528        1,037,906
         price*


            Average number of common
         and common
             equivalent shares              36,364,767        35,744,050       33,553,649
         outstanding<PAGE>





            Net earnings for diluted
         earnings per share
             computation                 $      10,328    $       28,781    $      17,025




            Diluted earnings per              $   0.28          $   0.81         $   0.51
         share*<PAGE>





          </TABLE>

           *Earnings per share and all share amounts have been adjusted to
           reflect the two-for-one split of the Common Stock to holders of
           record July 25, 1997 and the three-for-one split of the Common
           Stock to holders of record May 10, 1996.<PAGE>





          <PAGE>

                                     EXHIBIT 21

                     Subsidiaries of DEKALB Genetics Corporation

          The following table sets forth principal subsidiaries of the
          registrant and indicates as to each such subsidiary the state or
          other jurisdiction under the laws of which it was organized and
          the percentage of voting securities thereof owned by the
          registrant.


                                                          Percentage of
                                        Jurisdiction         Voting
                                             of            Securities
                                        Incorporation     Owned by the
                                                           Registrant


          DEKALB Swine Breeders, Inc. Delaware                100%
          DEKALB Argentina S.A.       Argentina               100%
          DEKALB Canada Inc.          Ontario                 100%
          DEKALB Italia S.p.A.        Italy                   100%


          The foregoing list does not name certain subsidiaries of
          subsidiaries and certain companies reported on the equity basis
          as in the aggregate they are not considered significant.

          No financial statements are filed for companies in which the
          registrant recognizes equity in undistributed earnings because
          all such companies in the aggregate are not considered
          significant.<PAGE>





          <PAGE>


                                     EXHIBIT 23

                      CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


          As independent public accountants, we hereby consent to the
          incorporation of our report dated October 2, 1998, included in
          this Form 10-K, into the DEKALB Genetics Corporation's previously
          filed Registration Statement File Numbers 33-24875, 33-33305 and 
          33-39986.





          ARTHUR ANDERSEN LLP




          Chicago, Illinois
          November 30, 1998