Caterpillar Inc. (NYSE: CAT) shares are declining after federal regulators opened an inquiry into the agricultural equipment industry. The stock dropped 6.04% to $811.37 at the time of publication on Wednesday.
The decline follows a joint request for information issued by the Federal Trade Commission (FTC) and the U.S. Department of Agriculture (USDA). The agencies are seeking public comments on how agricultural equipment is manufactured and distributed. The inquiry focuses on potential problems in these markets, including allegations of anticompetitive behavior.
The announcement specifically names Deere & Company but does not single out Caterpillar. The stock drop is attributed to sympathy with the broader farm equipment group, which is sliding in response to the regulatory action.
The inquiry builds on previous FTC settlements involving agricultural companies. The agency recently settled a case against Corteva Inc., with twelve states joining the agreement. This deal addresses allegations that the company limited competition in pesticide markets. Additionally, the FTC settled an antitrust case regarding repair restrictions imposed by Deere & Company, with five states joining. Under that settlement, farmers are permitted to repair their own John Deere tractors and other machines.
The USDA cited a rise in complaints from farmers regarding obstacles to purchasing equipment and accessing necessary services.
