Fonterra's outgoing chairman John Wilson faced a few curve balls during his tenure, Federated Farmers dairy deputy chairman Wayne Langford says.

The co-operative said this morning that Wilson had stood down from the role after a serious health scare.

Wilson will remain a director on its board until its annual meeting in November, when he will retire from the board.

The company said Wilson had undergone a significant surgery within the last month and would require ongoing treatment.

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Existing director John Monaghan will be the new chairman.

Langford, a Fonterra supplier who farms at Golden Bay, said the news had come as "a little bit of a shock" but that he wished Wilson well in his recovery.

He said the decision, together with the news that Monaghan would step in as chairman, would remove some uncertainty in the leadup to board elections.

"It answers the question that a lot of people were asking as to whether John was going to stay on or not," he said.

Wilson's time in the chair has been tumultuous, almost from the outset.

Less than a year after taking over from previous chairman Sir Henry van der Heyden, Wilson found himself in thick of a serious food safety issue in the form of WPC80 false botulism scare and precautionary product recall late in 2013.

The scare ended up costing Fonterra $183 million in compensation to French food giant Danone.

Extreme volatility in world dairy markets followed, with Fonterra's farmate milk price hitting a record $8.40/kg in 2013/14 before slumping to well below break-even in each of the ensuring two seasons.

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Many farmers were dangerously close to failing before Fonterra came up with a soft loan scheme, which was enthusiatically taken up by the majority of its members.

Then came the $755m purchase of an $18.8 per cent stake in China's Beingmate Baby and Child in early in 2015 - a company that has struggled to perform since.

Fonterra chief executive Theo Spierings and chairman John Wilson. Picture / Jason Oxenham
Fonterra chief executive Theo Spierings and chairman John Wilson. Picture / Jason Oxenham

Langford said WPC80 and Beingmate had been disappointing.

"But on the other hand, if we look at some of the positives, John was a really strong advocate of the farmers support loan during the low payout years," Langford said.

"That helped a lot of farmers get through - and that was for mums and dads down to the new share milkers as well," he said.

"One of John's strengths was that he was a dairy farmer who spoke for dairy farmers - sometimes quite bluntly - and I see that as a strength," he said.

"He had some tough decisions to make and I don't think he was perfect," Langford said.

Langford said the dairy industry had been through some big changes in a short space of time.

"John evolved and changed a lot during his time in the chair and that is a credit to him that we was been able to do that," he said.

"He got dealt some pretty bad hands, so that was tough, but I think farmers will respect the way that he would always connect," Langford said.

"He did have some tough times to work through, so people will judge for themselves."