John Wilson, Fonterra Chairman, gestures during an opening ceremony of Fonterra Demonstration Farm and Training Centre in Pannala, Sri Lanka February 24, 2016. REUTERS/Dinuka Liyanawatte

(Reuters) - Milk producer Fonterra FCG.NZ said on Friday Chairman John Wilson has resigned from his position with immediate effect over concerns regarding his health.

Fonterra’s board has selected company veteran John Monaghan as the co-operative’s new chairman.

Monaghan has been on the dairy firm’s board since 2008 and has played a key role in the search of a new chief executive, Fonterra said in a statement.

“Within the last month Mr Wilson has undergone a significant surgery and will require on-going treatment,” it added.

Earlier this year, Fonterra had flagged that Chief Executive Theo Spierings will leave his role later this year as part of a planned succession process.

Monaghan’s appointment comes at a time when global dairy prices have been depressed by increased production.