Ag Equipment’s Recovery Trade Meets Washington’s Scrutiny

Key Points

• The FTC and USDA launched a joint inquiry on Oct. 7 into potential anticompetitive conduct in agricultural equipment manufacturing and distribution.
• Shares of Deere, AGCO, CNH Industrial, and Caterpillar all fell sharply after the announcement of the inquiry, with AGCO suffering the steepest decline.
• The inquiry is only a request for information with comments due Dec. 7, 2026, so any regulatory action remains uncertain until early 2027.

On Oct. 7, the Federal Trade Commission (FTC) and the U.S. Department of Agriculture (USDA) launched a joint public inquiry impacting the agricultural equipment industry. Specifically, the agencies are looking at issues involving potential anticompetitive conduct in the way equipment is being manufactured and distributed.

The news sent agricultural equipment stocks plummeting. Deere & Co. NYSE: DE dropped 3.8%, AGCO NYSE: AGCO fell 6.2%, CNH Industrial NYSE: CNH fell 6.1%, and Caterpillar NYSE: CAT—one of 2026's strongest stocks—dropped by 5.9%.

The inquiry comes at a time when many of these agricultural stocks have begun to recover after a sharp sell-off, driven by weak equipment sales tied to inflation and higher interest rates, which impact the farming community more acutely than other areas of the economy.

Deere: The Company Regulators Already Know Best

Deere is the company most closely tied to this inquiry. In July, Deere settled with the FTC and five states. It agreed to give farmers and independent shops the same diagnostic and repair resources authorized dealers get for 10 years, and it paid $1 million toward the states’ legal fees.

The order also bars Deere dealers from retaliating against owners or shops that do their own repairs. That followed a separate $99 million class-action settlement with farmers in April.

DE is up approximately 35% in 2026, but that's not because of demand for agricultural equipment. In the company's Q3 2026 earnings report, it cited that Production & Precision Ag sales were down approximately 10%, and large-ag industry sales were down 15%-20% in North America.

Instead, Deere has benefited from the broader infrastructure buildout, including AI. Its construction and forestry business has become its fastest-growing segment, with customer backlogs extending well into fiscal 2027. Management still calls fiscal 2026 the bottom of the ag cycle and expects some recovery in 2027.

DE pulled back from a late-September high near $720 and closed below its 50-day simple moving average (SMA) around $654. The next support is the 200-day SMA near $593, which lines up with the August lows. As long as the stock holds above that level, the longer-term uptrend remains intact.

CNH Industrial: A Turnaround Story Under the Microscope

CNH wasn’t part of the Deere settlement, and that is why this inquiry matters to investors. Repair restrictions were a Deere-specific case. Dealer networks and sales territories are an industry-wide issue, so the inquiry reaches how every major manufacturer sells and services its equipment.

The timing is awkward because CNH has been one of the market’s favorite recovery stories. In August, CNH beat second-quarter expectations and raised its full-year adjusted earnings per share (EPS) guidance to between 41 cents and 46 cents from a range of 35 cents to 45 cents.

Shares spiked up as much as 15% that day. That happened even though CEO Gerrit Marx described the market as still at the trough, with North American tractor volumes down 16% to 17%.

CNH entered 2026 near $9.35 and now trades around $11.60, a gain of roughly 25%. The stock fell through its 50-day SMA (about $12.30) on the inquiry news but is holding above its 200-day SMA near $11.20.

The 50-day remains well above the 200-day. If the stock falls and closes below $11.20, it would suggest September’s run to $14.45 was the high-water mark for now.

AGCO: The Weakest Hand Going In

AGCO took the biggest hit, and that’s no coincidence. It came into the inquiry with the softest fundamentals of the group. In July, AGCO missed second-quarter estimates and cut its 2026 outlook to net sales of $10.1 billion to $10.2 billion and adjusted EPS of $5.50 to $5.75.

What stands out is where AGCO was finding strength. North American sales rose 19.8% in constant currency, driven by high-horsepower tractors and hay tools, and North American pricing ran at roughly 3.5%.

Pricing power in the U.S. farm market is exactly what an inquiry into equipment costs and dealer practices could put under pressure. When the company’s one bright spot sits in regulators’ crosshairs, the sell-off makes sense.

The chart tells the same story. AGCO is roughly flat for 2026. It has given back a February rally that topped $140, and a September bounce stalled near $135.

Shares now sit below both the 50-day SMA ($112.96) and the 200-day SMA ($116.50), and the 50-day crossed below the 200-day over the summer. The next support is around $100, near the August lows. A break below that level would put the stock at new 52-week lows.

Government Overreach? Not Yet

Is this a case of government overreach impacting the regular flow of commerce? Probably not, at least not right now. For the moment, this is a request for information (RFI). That doesn't mean the FTC or USDA will act on any data received.

But investors know all too well that even the most well-meaning government inquiry creates uncertainty. The agriculture industry is one area that doesn't need any more of that.

The comment window for the inquiry runs through Dec. 7, 2026. That means any regulatory action won't be known until early 2027 at best. Investors will want to pay close attention to any management commentary when these companies report earnings in the coming weeks.