Fonterra has had another big week with the announcement of a new interim CEO, Miles Hurrell.

Fonterra Farm Source Regional Head Waikato Paul Grave spoke to The Country Early Edition's Rowena Duncum about how the co-op's farmers have taken the news.

"The farmers and employees I've spoken to are very energised by the decision of the board to appoint Miles as the interim CEO."

Grave says Hurrell's 18 years' experience at Fonterra gives him a great understanding of Fonterra farmers and their families.


"Having a guy like Miles should be reassuring for our farmers."

Listen below:

Duncum asks Grave if he thinks Hurrell will become the permanent CEO.

"I think that's possible and I guess it's probably his to lose now. The board said they wanted to take stock of where things are at and what's needed to drive the co-op forward and I expect Miles will be getting on and just making that happen in the short term."

Last week Fonterra announced a drop in its 2017/2018 forecast Farmgate Milk Price and dividend, which Grave says would have been a "hard decision," but "necessary to protect the strength of the balance sheet for the long term interests of the co-op."

"A strong balance sheet is really important to our strategy," explains Grave, "it allows us to ... get a good credit rating ... and with a strong balance sheet we can provide our farmers with things they need."

Grave confirms that next season's forecast milk price still sits at $7kgMS.

Also in today's interview: Paul Grave discusses Fonterra's Climate Breakfast that was held last week.