The song is written from the point of view of a farmer who stalks a famous musician, believing that they are meant to be together. It was inspired by the true story of Robert Kieling, a Saskatchewan wheat farmer who became obsessed with popular Canadian singer Anne Murray in the mid-1970s and made repeated attempts to meet her, resulting in a restraining order and around 30 court appearances between 1980 and 1981. Kieling died in 2002, having never gotten over his obsession.  Kieling was also the inspiration for a musical play titled I Love You, Anne Murray, written by Paul Ledoux and David Young.
The lyrics of "Straw Hat" directly reference the lyrics of two Anne Murray songs in the second verse; "I cried a tear, you wiped it dry/I put you up, up, on a pedestal so high" is based on Murray's song "You Needed Me", while "spread my tiny wings and fly away" is based on the chorus of her hit "Snowbird".
- The fiddle riff of the song was played by Jim on a violin held in an upright position, much like the double bass he normally plays.