Humphreys will leave the loss-making business by "mutual agreement" at the end of March and recently appointed chairman Mustoe will "lead the executive team" until a new CEO is appointed. For four months Humphreys will act as an adviser to Mustoe, who joined in October and is still building his understanding of the business.
There is no timescale for the appointment of the new CEO, which means Mustoe will be in charge indefinitely. "Peter and I have been considering how we can best structure the executive team in order to drive the improvements that are required," said Mustoe. "We have now jointly agreed that the timing is right to announce that he will leave the business at the end of March."
Humphreys' departure comes at a difficult time for the farmer-owned co-operative. In September the company reported that its turnover was down 3% to £582m for the year to 31 March 2009, and it made a pre-tax loss of £10m.
The company has also come in for criticism from the NFU for cutting its price to members by 0.65ppl to 21.4ppl, making it one of the lowest payers in the industry.
Mustoe has made improving the profitability of First Milk's cheese business a priority and the company cashed in £18.8m of shares in Robert Wiseman Dairies late last month to allow it to invest in the division.
Humphreys is understood not to have a new position lined up.