One distinctive feature of the Shire, is that it was surrounded by mostly empty space. A combination of emigration (the Elves), war (Arnor and later Arthedain

One distinctive feature of the Shire, is that it was surrounded by mostly empty space. A combination of emigration (the Elves), war (Arnor and later Arthedain vs. Angmar), and plague, had opened up a lot of open space. This is not just how the Hobbits got the Shire in the first place (the King of Arthedain had spare land to grant them), it also allowed them to expand when their population needed to. Buckland was described by JRRT as a "colony" of the Shire, and after the LotR they expanded westward again, creating the Westmarch (hence "the Red Book of Westmarch", which LotR was supposedly translated from). What the Hobbits would have done if they had been in a place without room to expand, is interesting to debate, but in the actual Third Age they could have lots of kids, and just expand into more good farmland when they needed to, because emigration, war, and plague had cleared the areas around them.