Federated Farmers says Colin Armer's resignation from Fonterra has come as a surprise and it is concerned the dairy cooperative's board is losing its 'old blood'.

Fonterra director Armer, who was seen by some as the natural successor to outgoing chairman Sir Henry van der Heyden, stood down yesterday with immediate effect.

Federated Farmers was sad Armer would not be seeing out his term to November's annual general meeting, said dairy chairperson Willy Leferink.

"It was a shock. I thought Colin would have stuck with it for the next three or so months.


"I think it's important we have some sort of continuity and I don't know why he resigned."

Leferink said the news added weight to the argument for Fonterra needing a deputy-chairman and he thought the dairy giant was still coming to terms with how big it had become.

Armer's decision meant the Fonterra Board would lose some genuine institutional knowledge.

"It seems to be going from a blended board of new blood and older hands, to a board where there will be a number of reasonably fresh directors.

"That's not a criticism of the new directors, but experience needs to be retained in a blended board."

But it would open up the opportunity for "some farmer-shareholder fresh blood" to enter the mix, he said.

Fonterra last month named long-serving director John Wilson as van der Heyden's replacement.

Wilson, who has been a director of the cooperative since 2003, will take up the new role when van der Heyden steps down at the annual meeting in December.

Armer was seen by many farmers as the logical next choice of chairman.

Wilson, on the other hand, was understood to have been van der Heyden's preferred choice as a successor.

Armer said in a statement yesterday: "For many years I have been, and continue to be, a strong supporter of the New Zealand dairy industry and an advocate for Fonterra's important work. I will continue to be.''

He thanked shareholders who had supported him in the past and said he would continue to support the Fonterra cooperative model in the future.

Armer was elected to the Fonterra board in 2006 and was chairman of the supplier relations committee, the international farming ventures group, and the milk payments working group.

He also sat on the audit, finance and risk committee, the appointments, remuneration and development committee and the external relations committee.

Farmer shareholders will vote on a new director at December's annual meeting.

Armer and his wife Dale last week made the NBR Rich List 2012 with an estimated fortune of $200 million.