UPDATED 9.55am: Fonterra is in damage control mode, trying to shut down speculation chief executive Theo Spierings is about to step down.

A Fonterra spokesman is categorically denying any such move, and the co-operative's twitter page says any speculation about Theo's position is completely untrue.

NZME's The Country host Jamie MacKay said Mr Spierings is not the most popular figure among farmers at the moment.

"The only thing I would say is that if they can get Christopher Luxom from Air New Zealand I'd grab him with both hands."

He added that Spierings "hasn't been universally liked by dairy farmers, he's overseen some failures at Fonterra."

The speculation began in The Australian Newspaper, and went as far as to suggest Air New Zealand chief executive Christopher Luxon is earmarked as his most likely replacement.

Mr Spierings has headed the dairy giant for about five years.

Last year he faced criticism as Fonterra’s Australian arm fell into loss making territory, triggering a sale of its Australian yoghurt and dairy dessert business to Parmalat Australia in a quest to return it to profitability.

The Australian reports that talk of Spierings' departure comes after Murray Goulburn chief executive Gary Helou recently left the Australian dairy, co-op following the shock profit downgrade.

Sources close to Fonterra are dismissing the suggestions.

Fonterra is the largest company in New Zealand, and is responsible for almost a third of global dairy exports.