The surprises kept coming at dairy giant Fonterra with the appointment of existing staffer Miles Hurrell as interim chief executive.

The company also announced that it would halt its global executive search to replace the outgoing Theo Spierings and that it would review its business portfolio and direction.

Hurrell, who is the chief operating officer for the co-op's Farm Source unit, replaces Spierings, who leaves the top job next month after eight years.

Christchurch-born Hurrell, with his 18 years experience with the co-op in New Zealand and around the world, is a popular choice among Fonterra's farmer-shareholders.

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Last week, the co-op surpised the market with a downward revision to its earnings for the 2017/18 financial year and a cut in its farmgate milk price. A second-half dividend was unlikely, it said.

In July, Fonterra announced that John Wilson had stood down from his position as chairman as he recovered from a health scare.

Wilson's replacement, John Monaghan, said the board was clear that it was not best practice to have the chairman and chief executive step down at the same time, "but events have overtaken that decision".

"I have agreed with the board that we will stop the global CEO search while we review the co-operative's current portfolio and direction," Monaghan said.

"It's important that we give ourselves the time to take stock of where we are as a co-operative, breathe some fresh air into the business, then determine any changes that are needed," he said in a statement.

The moves come as Fonterra faces the challenge of high debt and tight margins, which have put is balance sheet under pressure.

Beyond the appointment, analysts were attatching more significance to the news of a stocktake of the company's existing business and future direction.

Harbour Asset Management senior analyst Oyvinn Rimer said Fonterra had signalled that it wanted to have "have a really good look" at the business.

"It's probably overdue, but it's good to see it happening. I guess everything is on the table here," Rimer said.

Fonterra chairman John Monaghan, left, with Fonterra acting chief executive Miles Hurrell / Jason Oxenham
Fonterra chairman John Monaghan, left, with Fonterra acting chief executive Miles Hurrell / Jason Oxenham

Separation of Fonterra's ingredients business from its brands could be perhaps the most logical step, he said.

Rimer said the current structure was fraught with conflicts of interests between the milk price paid to farmers and the dividend, which investors outside the co-op have access to in the NZX-listed Fonterra units.

Monaghan and Hurrell, interviewed in the Fonterra's chairman's dedicated office at its Auckland headquarters in Fanshawe St, were giving little away in terms of what may lie in store for New Zealand's biggest exporter.

The new chairman was also at pains to hose down any intrigue surrounding the interim appointment.

"Theo has been very constructive and he will leave as a friend of Fonterra and a strong supporter of the co-op," he said.

All the same, Federated Farmers vice president Andrew Hoggard said "it looks quite messy from the outside".

Monaghan said Fonterra, fundamentally, was a well-performing business.

"But it is at a natural juncture just to look at the performance of all the assets and the return thats we are getting from those assets," he said.

"It really is about adapting our co-operative for the future and setting it up for the next five, 10 or 15 years," Monaghan said.

Hurrell was in New Zealand when the milk price hit a record $8.40/kg in 2014 before it slumped to a near crippling $3.90/kg the following year, and was involved in the formation of the soft loan support package for farmers that followed.

He worked for Fonterra in parts of Africa and the Middle East, and was in Chicago during at the height of the global financial crisis, and confessed to "a few ruck marks" on his back.

Asked about his plans for the co-op, Hurrell said: "I'm not looking too far ahead," he said.

"At this point, my job is to work with the team, our board, our farmer shareholders to ensure that we deliver on the promises that we have given them."

Federated Farmers vice dairy chairman Wayne Langford said Hurrell was "very capable, particularly in a leadership role".

Still, there remains farmer disquiet over the series of high-level changes that have occurred at Fonterra since the start of the year, when the co-op issued its first earnings downgrade.

"We are going to be moving through a period of change and it's been something that farmers have been looking at for a while," he said.

Langford, a Fonterra supplier who farms at Golden Bay, said Hurrell was competent and capable.

"What you see is what you get with Miles," Langford said.

"And that's very important for the co-op right now."

Craigs Investment Partners head of private wealth research Mark Lister said Fonterra had a number of things to do to get the company on track but the appointment is "a step towards it ...so credit where credit is due".

Fonterra Shareholders' Council chairman Duncan Coull welcomed the move to appoint an interim chief executive.

"With much uncertainty at the moment around some activity in Fonterra, any news that provides some certainty and continuity going forward is welcome.

"Delaying the international search, given the change of chairman and what's going on at the moment is a positive move ... the (board) understanding that we need to get it right is critical."

Coull said Hurrell was well known to farmer-shareholders, which would "bring some comfort, as will the fact he's a Kiwi, though I don't think that is defining".

"It gives an opportunity for the business to bed down and to work through building confidence back into the shareholder base and the wider public arena."

- additional reporting: Andrea Fox