Amy's poem is about watching a parent do something that is slowly harming him. The speaker flinches at every puff of the cigarette because she understands where it leads: one day soon, her father will be gone. The second stanza turns to him. He knows the danger too, but he can't stop, and the phrase "you just have to blow that smoke" makes it sound more like compulsion than choice.
The last stanza shifts from watching to imagining. The speaker pictures picking up the phone, perhaps to hear the news she dreads, and answering ahead of time with "It's okay Daddy, I'll be prepared." The word "Daddy" makes her sound young and tender, while the promise to be prepared sounds like a brave attempt at control. Judging by the poem, she may be forgiving him in advance.
The mood is quiet, sad, and full of resigned love. Nobody argues or pleads. Both people simply know, and the poem's short lines let that shared knowledge hang in the air like smoke.