DE, CNH, CAT, AGCO Stocks Slump - FTC, USDA Inquiry Puts Farm Equipment Market Practices In Focus

• The agencies said the inquiry follows a growing number of complaints from farmers.
• Public comments on the inquiry are open until December 7.
• Deere had recently reached a settlement with the FTC over restrictions on farmers’ ability to repair John Deere equipment.

Shares of major farm-equipment makers fell on Wednesday after the Federal Trade Commission and the U.S. Department of Agriculture opened a broad inquiry into business practices across the agricultural equipment market.

At the time of writing, Deere & Co. (DE) was down 3%, AGCO Corp (AGCO) slumped nearly 6%, clocking its worst day since June, while CNH Industrial (CNH) shares declined 5.3%.

Shares of Caterpillar (CAT), which manufactures small dozers and loaders for farming, also traded 6% lower.

What Are Regulators Looking At?

The FTC and USDA are asking farmers, repair shops, dealers and industry employees to share information about possible barriers to buying, servicing and repairing agricultural equipment.

The agencies said the inquiry follows a “growing number of complaints” from farmers who say they face barriers to acquiring equipment and the services needed to keep it operating.

Regulators are also seeking examples of “restrictions, penalties or retaliation” and information on how industry practices may affect pricing, competition, innovation and farmer welfare.

Public comments on the inquiry are open until December 7, the notice read.

Deere's Faced FTC Scrutiny In July

The latest inquiry comes just months after the FTC reached a settlement with Deere over restrictions on farmers’ ability to repair John Deere equipment.

As part of the settlement, Deere must give farmers and independent repair shops access to the same repair tools and software available to its authorized dealers for the next 10 years.

The FTC said that settlement will ensure that farmers can “enjoy the right to repair their own John Deere tractors and farm equipment.”

Retail Sees ‘Huge’ Buying Opportunity

Retail sentiment surrounding DE and CNH on Stocktwits turned ‘neutral’ from ‘bearish’ over the past 24 hours, while sentiment around AGCO and CAT was ‘bullish.’

One retail trader on the platform said DE stock was “way oversold”

DE shares have been on a smashing run this year, surging 196%. CNH and CAT stocks have rallied around 35%, while AGCO has edged around 4% higher.

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